ORAL ANSWERS TO QUESTIONS

SCOTLAND

The Secretary of State was asked—

2014 Commonwealth Games

Jim Sheridan: What assessment he has made of the potential effects of the legacy of the Glasgow 2014 Commonwealth games on the UK tourism industry.

Alistair Carmichael: The Glasgow 2014 Commonwealth games provide a great opportunity to showcase Glasgow to the world. Following my recent meeting with Gordon Matheson of Glasgow city council, I am left in no doubt that the games will provide a long-lasting legacy of which the people of Glasgow can be proud. The United Kingdom Government are taking every step to promote the business opportunities that the games present, and I should be happy to receive suggestions in that regard from any Member in any part of the House.

Jim Sheridan: I welcome the Secretary of State to his first session of Scottish questions. I also send best wishes to his predecessor, who was a thoroughly decent man. [Hon. Members: “Hear, hear.]
	Next year’s Commonwealth games will attract thousands of visitors to Scotland. I believe that the best legacy that we can give them is to ask them to come back and visit us again, but that may be extremely difficult for some, given the high rate of air passenger duty. Will the Secretary of State ask his colleagues in the Treasury to review the position, and to carry out an impact assessment of the effects of APD on tourism in Scotland and in the United Kingdom as a whole?

Alistair Carmichael: I am grateful to the hon. Gentleman for his welcome to what is, in fact, my first session of Scottish questions as Secretary of State. I have been present for Scottish questions once or twice before.
	Let me also associate myself with the hon. Gentleman’s tribute to my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore), who did an excellent job. The additional powers that were given to the Scottish Parliament through the Scotland Act 1998 and the negotiation of the Edinburgh agreement are a lasting legacy from him.
	I am aware that Glasgow airport is an important asset for the hon. Gentleman’s constituency, and I commend him for the vigorous way in which he prosecutes its interests. I always welcome any representations from
	Members in any part of the House, but air passenger duty is a matter for the Chancellor of the Exchequer, and the hon. Gentleman should get his representations in early ahead of the autumn statement. Good luck to him.

Iain Stewart: I, too, welcome my right hon. Friend to his new position.
	An important legacy from London 2012 was better working between the transport agencies and providers. May I urge my right hon. Friend to work with Transport Scotland and other agencies to ensure that a similar legacy can be secured for Glasgow?

Alistair Carmichael: I hope very much that that will happen. A significant transport legacy has already been established by the organisers of the games, and I see no reason why the lessons of the Olympic games, which are substantial and readily available, should not be learnt by those in Glasgow.

Margaret Curran: I join others in welcoming the Secretary of State to his new position, and in paying tribute to his predecessor.
	The legacy of the Commonwealth games is vital to the people of Glasgow and their prospects, particularly in relation to jobs, but today that legacy has been overshadowed by reports concerning the future of shipbuilding on the Clyde. The work force on the Clyde are renowned for their skills and expertise, but they now face uncertainty about their future. Will the Secretary of State assure the House that he will work with trade unions and with the company to minimise any potential job losses, mitigate the effects on communities, and secure the future of shipbuilding on the Clyde?

Alistair Carmichael: I thank the hon. Lady for her welcome. I can give her every assurance that, as in the recent crisis surrounding the Grangemouth plant, I will work with any party in any part of the country where Scotland’s vital interests are involved. I extend that invitation to the hon. Lady, to the Scottish National party, and to the Scottish Government. The issue is clearly important. Today is a day that we always knew was coming, but I believe that we will meet the challenges much more effectively by working together.

Menzies Campbell: May I urge my right hon. Friend to take the opportunity, as soon as he can, to visit the sporting facilities that have been created in the east end of Glasgow, particularly the indoor athletics track and the velodrome which is named after Sir Chris Hoy? Does he recognise that they meet the highest possible international standards, and constitute a substantial sporting legacy for the city of Glasgow and, indeed, the whole of Scotland?

Alistair Carmichael: For, very possibly, the first time in the 30 years for which I have known my right hon. and learned Friend, I am one step ahead of him. I have, in fact, visited those facilities, and I was immensely impressed, principally by the fact that they are already accessible to some 75,000 people in the area. They will indeed constitute a lasting legacy. Glasgow city council has the opportunity to provide a business legacy, and I am delighted to announce that it has made the Glasgow city chambers
	available to UK Trade & Investment and other organisations for the duration of the games so that they can promote business opportunities.

Angus Robertson: I welcome the Secretary of State to his position. Today is a very sad day for many families in Glasgow, and I am sure the thoughts of everybody on both sides of the House are with them. How will the legacy to Glasgow of the Commonwealth games be affected by large-scale skilled industrial job losses in the city?

Alistair Carmichael: I thank the hon. Gentleman for his welcome. As I have already said, we are working with UKTI to bring more business opportunities to Glasgow. As for the announcements, we will hear from the Secretary of State for Defence later today what the full extent of these developments is going to be, but they will be best tackled if we all work together. We have known for a long time that this day was coming.

Angus Robertson: And the legacy to Glasgow will be serious if nothing is done to help those who need it, so what can the Secretary of State and his Government do to help people in these circumstances?

Alistair Carmichael: I will be doing what I have been doing since the day and hour I took over this job. I will work with the hon. Gentleman’s colleagues in the Scottish Government, if they are prepared to work with me. I will work with the councillors and officers at Glasgow city council. I will work with UKTI and, most of all, I will work with BAE Systems, which, in very difficult circumstances, has handled itself in a way that should be commended.

“Go home or face arrest” Campaign

Pete Wishart: What discussions he has had with the Secretary of State for the Home Department on the display of materials from the “Go home or face arrest” campaign in the Glasgow UK Border Agency office.

Alistair Carmichael: I recently met both my right hon. Friend the Home Secretary and my hon. Friend the Minister for Immigration to discuss a range of immigration matters, including the campaign to which the hon. Gentleman refers. In a written statement last week my hon. Friend the Minister for Immigration informed the House that the poster campaign has no future in Scotland.

Pete Wishart: I thank the Secretary of State for that answer, but was it not absolutely appalling that these disgusting and xenophobic materials graced a public office in Scotland, contrary to everything we have tried to achieve through good and positive community relations in Scotland? This is all about a race to the bottom with the UK Independence party on immigration. We do not even do UKIP in Scotland. We do not even do Conservative; we have got the one lone panda of a Minister, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), sitting there. Can the Secretary of State reassure me that we will never see the likes of these posters again in Scotland?

Alistair Carmichael: This is a serious issue, and I accept that these posters were not appropriate, but I think a slightly more measured approach than the hon. Gentleman’s is appropriate to questions such as this. It was made clear in the Immigration Minister’s statement last week that these posters will not be back. I am content with that position.

Philip Hollobone: What is the Secretary of State’s estimate of the number of illegal immigrants in Scotland?

Alistair Carmichael: I do not have that figure to hand, but I will be more than happy to make the appropriate inquiry and write to my hon. Friend.

Keith Vaz: I understand that the Secretary of State personally intervened to oppose this campaign. Can he tell us about the fate of the vans that were central to this campaign? Are they going to be pulped—or maybe recycled and used as ministerial vehicles?

Alistair Carmichael: For me, the ministerial vehicle remains, while I am in London, the No. 159 or No. 3 bus, so I do not think I would derive any benefit from the right hon. Gentleman’s proposal. The vans were not used in Scotland, of course. There was, however, substantial concern about the use of the posters on the UKBA office there, which I have to say was particularly inappropriate given the good efforts of Glasgow city council and the wider community in Glasgow to ensure that the tone of the treatment of people coming to the city is appropriate.

Tony Baldry: If the Scottish nationalists want to give everyone such a warm welcome in Scotland, can those of us whose grandfathers fought in the first world war with the Highland Light Infantry and whose great-grandfathers fought with the Gordon Highlanders and who consider ourselves in large part to be Scots, and consider Scotland in part to be home, have a vote in the referendum as well?

Mr Speaker: That is an ingenious question, but it suffers from the disadvantage of being entirely unrelated to Question 2.

Katy Clark: I welcome the Secretary of State to his post and pay tribute to the hard work that his predecessor put in. Positive Action in Housing, which he will be aware works with asylum seekers in Scotland, has called the posters “shameful and deeply offensive”. Given what he said about the tone, does he agree with that comment?

Alistair Carmichael: I have made it clear that I consider the posters to be inappropriate. They were part of a trial, they have gone and they will not be back. I do not think anything else really matters.

Energy Prices

Angus MacNeil: What recent discussions he has had on the effects of increasing energy prices on households in Scotland.

Mark Lazarowicz: What recent discussions he has had with Ministers of the Scottish Government on household and business energy bills.

Cathy Jamieson: What recent discussions he has had with Ministers of the Scottish Government on household and business energy bills.

Alistair Carmichael: Rising energy bills are obviously a serious concern for consumers and businesses. Over the past weeks, I have discussed the issue with representatives of the major energy companies. We continue to work closely with Scottish Government Ministers on all matters facing the economy in Scotland, including energy prices.

Angus MacNeil: As a fellow islander, may I say that it is good to see an Ileach, an Islay man, at the Dispatch Box? With my constituency suffering the highest level of fuel poverty in the UK, can the Secretary of State investigate the benefits that some renewables might bring to offset that? Although it is good that the islands will have different renewables strike prices, he well knows that not all islands are the same. Will he represent that view to the Secretary of State for Energy and Climate Change, to make sure that all islands can benefit and we can tackle these high energy prices?

Alistair Carmichael: I am grateful to the hon. Gentleman for allowing me the opportunity to remind the House of this Government’s great achievement in establishing, and putting out for consultation, a strike price for island communities, which will make the development of renewable energy in communities such as his and mine a viable proposition at long last. That may have a contribution to make to tackling fuel poverty. I have already worked closely with the leader of his local council in this matter, and I urge him to do the same.

Mark Lazarowicz: The Government have been giving strong indications that they intend to move some of the cost of paying for energy efficiency to general taxation, and the Scottish National party Government have said that they want to do the same. Unless we also have measures such as Labour’s energy price freeze, would such a transfer not just let the energy companies off the hook and reduce the pressure on them to control prices?

Alistair Carmichael: The hon. Gentleman is absolutely right to say that the position announced by Nicola Sturgeon takes money off energy bills but is going to have to be made up for elsewhere. At a time when there is already a £3.4 billion black hole in the SNP figures, one has to think that that is not going to offer much hope for people struggling to pay their energy bills already. We all know the problems associated with his prize freeze, and I have no doubt that they will be rehearsed in the House later today. My particular concern relates to the position of smaller energy companies, which are at risk of being forced out. If we reduce the number of companies in the market, we will see prices go up—that cannot be good.

Cathy Jamieson: The Scottish Government and UK Government Energy Ministers appear to have joined forces to suggest that Labour’s plans for an energy price
	freeze would put the lights out. I know the Secretary of State to be a sensible man, so has he talked to the Scottish Government about this and does he agree that the energy price freeze would deliver a £120 saving to my constituents?

Alistair Carmichael: I am afraid that we have heard dodgy figures from the Labour party before, and I think we have just heard yet another one from the hon. Lady. The truth is that Labour’s price freeze does risk reducing the number of companies in the market. If competition is reduced, the price goes up. That is basic economics and the Labour party should learn it.

Alan Reid: People who are on SSE’s “Total Heating, Total Control” system have been told by SSE that their system will not work properly if they switch to another supplier, which means that they are totally dependent on SSE and the huge price increases that it places on them. That is an unacceptable abuse of a monopoly, so will my right hon. Friend investigate it?

Alistair Carmichael: I am aware of the issue from my own constituency mailbag, and it relates to those currently on the “Total Heating, Total Control” tariffs. It is a fairly complex position, but I say to SSE that it has enormous customer loyalty from throughout the highlands and islands. When we get the answers to the questions that my hon. Friend poses, I shall be looking at them very closely, because I want to ensure that the customer loyalty that its hydro has in the highlands and islands is valued, and not abused.

Michael Crockart: Ofgem has estimated that £27 of the average annual fuel bill pays to help the fuel poor, £21 pays for renewable obligations and £6 pays for feed-in tariffs. That comes to a total of £54, which is less than the tax paid on a single tank of petrol. Does the Secretary of State agree that that is a good return on a small outlay?

Alistair Carmichael: My hon. Friend makes the point very well that although there are such charges on electricity bills the money is then spent wisely on improving the quality of housing and energy efficiency. That, of course, is the real opportunity offered by the energy debate and I think that the Government are sensible to pursue it.

John Stevenson: Does the Secretary of State agree that the way to reduce energy costs overall is to encourage competition, support innovation, increase supply and remove unnecessary costs rather than a price freeze?

Alistair Carmichael: I wonder whether my hon. Friend and I might have a slight difference of opinion in what we consider to be an unnecessary cost, but with that one caveat I have absolutely no difficulty in agreeing with him. Such an approach runs wholly counter to the Opposition’s proposals.

Sandra Osborne: Last Saturday, my advice surgery was full of desperate people who do not know how they are going to get through the week, never mind through the winter.
	If the Government are not prepared even to consider the price freeze, what action will they take right now to help people to get through the winter?

Alistair Carmichael: I take seriously the hon. Lady’s point. That is a real and deep concern for households across the country and that is why the Government have taken action on a number of fronts. This year, 230,000 homes will be warmer because of the increased energy efficiency measures that we support and 2 million vulnerable households will get help under the warm home discount. That is £135 off electricity bills for some of the poorest pensioners. The ongoing winter fuel payment for older people and the £25 cold weather payment have been made permanent by this Government.

Margaret Curran: Labour’s energy price freeze would save Glasgow and Edinburgh city councils, Scotland’s two largest local authorities, close to £3 million a year. That is equivalent to 71 teachers and 140 care workers. In the vote later today, will the Secretary of State vote with the Tories and side with the energy companies or will he vote for Labour’s energy price freeze and side with the people of Scotland?

Alistair Carmichael: I will be supporting the coalition Government and I am proud to do so, because we recognise that there are no easy answers in this debate and that the proposals from the Opposition will end up putting people’s prices up.

Scottish Independence

Andrew Stephenson: What assessment he has made of the effects on businesses in north-west England of Scotland remaining part of the UK.

David Mundell: The detailed Scotland analysis papers we have published underline the value to businesses across the whole of the United Kingdom of Scotland remaining part of the Union. As it stands, the UK is a true domestic single market and currency union with free movement of goods and services, capital and people.

Andrew Stephenson: The Minister will be aware of the encouraging economic signs across the north-west of England, with employment up and a recent regional purchasing managers index showing that growth is higher than in any other region in the UK. Does the Minister agree with me that remaining part of the UK is the best way forward for Scottish business?

David Mundell: I absolutely agree with my hon. Friend that that is the best way forward not just for Scottish business but for business in the whole of the UK. Businesses in his constituency benefit from the single domestic market, which includes Scotland.

Stewart Hosie: I expect that Scotland will vote yes to independence next year and in those circumstances, the best hope for businesses in the north-west of England—and, indeed, businesses throughout England, which sell £50 billion of goods and services to Scotland every year—is the maintenance of sterling in a formal currency union, which was described by the
	right hon. Member for Edinburgh South West (Mr Darling) as logical and desirable. Does the Minister agree with the right hon. Gentleman or with yesterday’s scaremongering “project fear” nonsense from the Chief Secretary?

David Mundell: I most certainly do not share the hon. Gentleman’s expectation of the outcome of the referendum. He now chooses who to listen to. He used to listen to Mr Jim Cuthbert, who said:
	“It’s very difficult to have independence within a currency union. Greece says it all. In any currency union, there are restrictions on individual members and that doesn’t equate to independence.”

Gordon Banks: Businesses in north-west England and in Scotland need much the same things, so will the Minister tell the House what Mark Allan, Axa UK’s economist, Brian Ashcroft, professor of economics at Strathclyde university, Andrew Goudie and John Kay, former economic advisers to Alex Salmond, and Gavin McCrone, former chief economist at the Scotland Office, have in common on the impact of currency decisions on business if Scotland does not remain part of the UK?

David Mundell: All those eminent individuals know that Scotland continues to benefit from being part of the single UK domestic market, and they know that anyone who votes for independence on the basis that Scotland would keep the pound in a currency union is hanging their coat on a very shoogly peg.

Royal Mail Privatisation

Graeme Morrice: What assessment he has made of the effects of the privatisation of Royal Mail on people in Scotland.

Alistair Carmichael: The privatisation of Royal Mail will protect the universal mail service for the people of Scotland. The Government, with their 30% stake, remain a substantial shareholder committed to the future growth of the company. By transferring the liabilities of the Royal Mail pension plan in April 2012, the Government have safeguarded the benefits for postal workers in Scotland and across the UK that had accrued up until that date.

Graeme Morrice: But can the new Secretary of State provide answers to the many people living in rural Scotland, along with the dwindling band of Scottish Lib Dem supporters, who believe that the coalition Government’s privatisation of Royal Mail is wrong and will lead ultimately to the end of the universal service obligation?

Alistair Carmichael: If this privatisation was a threat to rural Scotland I would not support it. This is a privatisation born not from ideology but from necessity. Without it, the real threat would be Royal Mail losing business hand over fist, as it has since his Government liberalised the letter-post market.

Malcolm Bruce: Does my right hon. Friend agree that the privatised Royal Mail, free from state aid restrictions and competition rules, offers
	the best opportunity of promoting the last-mile delivery service and securing the jobs of our dedicated local posties?

Alistair Carmichael: My right hon. Friend has a rural constituency that I know well. The points that he makes are very well made. This was necessary to save the universal service and, for the first time, legislation privatising Royal Mail brought with it meaningful protections for that universal service.

Ian Davidson: Does the Minister agree that the privatisation of Royal Mail is likely to increase the cost of letters to Govan shipbuilders? Does he therefore agree that action must be taken to guarantee the future of Govan shipbuilders as quickly as possible? Does he also agree—

Mr Speaker: “Also” is not required.

Alistair Carmichael: I commend the hon. Gentleman for his ingenuity in getting a reference to Govan shipbuilders on the record. He will have to wait to hear the full extent of the announcement. I assure him that Govan shipbuilders will benefit from the same mail delivery protections from Ofcom as everyone else.

Michael Weir: Under the Postal Services Act 2011 the only protection for consumers is from Ofcom. Given the less than stellar performance of other utility regulators, why should consumers in Scotland have any confidence that their services will be protected?

Alistair Carmichael: As I think the hon. Gentleman knows, but as he continues to ignore, the difference is that this time we have included meaningful protections that give Ofcom the power it needs to protect communities such as mine and his.

Scottish Independence

Alison McGovern: What assessment he has made of the potential effects on cultural tourism in the UK of a yes vote in the referendum on Scottish independence.

David Mundell: Cultural tourism is thriving in Scotland and across the whole United Kingdom. We want Scotland to remain part of the UK to ensure that there are no unnecessary barriers to Scots visiting great cities such as Liverpool, and that people on the Wirral and across the United Kingdom can enjoy the great cultural experience that is Scotland.

Alison McGovern: When Liverpool became city of culture we took inspiration from our friends in Glasgow. Given the significant sporting and cultural connections between the cities of the north-west of England and the cities of Scotland, does the Minister think that our thriving visitor economy will be helped or hindered by an international border between north-west England and Scotland?

David Mundell: I can see no benefit to putting any barriers between Scotland and other parts of the United Kingdom, and I am sure our great city of Dundee in Scotland will learn from Liverpool’s experience at it seeks to become the city of culture.

Several hon. Members: rose—

Mr Speaker: Order. In the week in which he celebrates 40 years’ uninterrupted service in the House of Commons, I call Sir Alan Beith.

Cross-border Strategic Roads

Alan Beith: What recent discussions he has had with Ministers of the Scottish Government on cross-border strategic roads.

Alistair Carmichael: My office keeps in regular contact with the Scottish Government on all transport issues concerning Scotland. The Government set out their commitment to a feasibility study on improvements to the A1 north of Newcastle. I am not aware of any such commitment on cross-border routes from the Scottish Government.

Alan Beith: If Ministers want to give a very clear signal that England and Scotland are better together, may we have some tangible evidence before the referendum vote that the strategic road linking eastern England and Scotland will be dualled completely?

Alistair Carmichael: I add my commendation to my right hon. Friend for the longevity and the quality of the service he has given to his constituents and to this House. He will know that we have already announced a feasibility study. That demonstrates our commitment to the case for further work. I am more than happy to work with him and with the Scottish Government if that is necessary in future.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Steven Baker: If he will list his official engagements for Wednesday 6 November.

David Cameron: With Remembrance day coming, I am sure the whole House will join me in remembering those who have given their lives in the service of our country. Perhaps particularly with the President of the Republic of Korea here, we should remember those who fell in that conflict and all those who served, many of whom are now coming to the end of their lives, and we should again pay tribute to the heroic job our armed forces do to keep us safe.
	This morning I had meetings with ministerial colleagues and others and, in addition to my duties in this House, I shall have further such meetings later today.

Steven Baker: I am sure we all wish to associate ourselves with the Prime Minister’s fitting tribute.
	Hard-working businessmen facing tough decisions, decent trade unionists and newspapers including the Daily Mirror will have been appalled by the so-called leverage tactics of Unite in the Grangemouth dispute. Will my right hon. Friend take steps to ensure that families, children and homes are protected from a minority of militants?

David Cameron: My hon. Friend makes an important point. This sort of industrial intimidation is completely unacceptable. We have seen “Wanted” posters put through children’s letterboxes, we have seen families intimidated and we have seen people’s neighbours being told that
	they are evil. What has happened is shocking. It is also shocking that the Labour party is refusing to hold a review and to stand up to Len McCluskey. At this late stage, it should do so.

Edward Miliband: Let me start by joining the Prime Minister in recognising the enduring importance of giving thanks on Remembrance Sunday to all those men and women who have served our country. This is a moment to remember all those who have lost their lives and to think about their families. That is why I know Members from across the House and people across the country are wearing their poppies with pride this week.
	Can the Prime Minister guarantee that there will not be an accident and emergency crisis this winter?

David Cameron: We will do everything we can to make sure that the NHS continues to perform in the excellent way it does today. Let me give the right hon. Gentleman the latest figures: last week was the 27th week in a row that we met our A and E targets. The NHS is treating 1.2 million more people in A and E than it was when he was in office. But I can tell him where there will be a particular problem. There will not be a winter crisis in the NHS in Wales, where Labour is in control, because there is a crisis every day of the week in Wales, where Labour is in control.

Edward Miliband: The Prime Minister is simply wrong about the figures. If we look at what is happening in our hospital A and E departments, we see that the target has been missed for 15 consecutive weeks. The whole country will have heard that he cannot guarantee that there will not be a crisis in our A and E departments this winter, and that is because there already is a crisis. That is what the president of the College of Emergency Medicine says. [Interruption.] I know that Government Members do not want to hear about the crisis in A and E departments. He says that
	“there are almost daily instances in most A&E departments of patients facing extended trolley waits.”
	The Prime Minister said two years ago:
	“I refuse to go back to the days when people had to wait for hours on end to be seen in A&E”.
	He has broken that promise, has he not?

David Cameron: As I said, A and E departments in this country are now treating 1.2 million more patients than they were under Labour. Let me give the right hon. Gentleman one simple fact—[Interruption.]

Mr Speaker: Order. There is simply too much noise on both sides of the Chamber. I appeal to the House, because I get bucket-loads of letters every week from members of the public complaining about it. Cut it out: it is low-grade, down-market and unnecessary.

David Cameron: Let me give the right hon. Gentleman one simple fact: today in our A and E departments the average waiting time is 50 minutes. When the shadow Health Secretary was sitting on the Government Front Bench the average waiting time was over 70 minutes. Those are the facts. Because this Government did not take the shadow Health Secretary’s advice—[Interruption.] I would not listen to him, because he is the man who refused to apologise for the mess at Stafford. The NHS in our country is getting better under this Government.

Edward Miliband: Across the medical profession they are saying that there is a crisis in A and E, but the Prime Minister is saying, “Crisis? What crisis?” How out of touch can he be? In the last year, 1 million people waited more than four hours in A and E. A and E waiting times are up, the number of patients kept waiting on trolleys is up, delayed discharges are up, and ambulance response times are up. Why is that happening? It is because of his top-down reorganisation, which nobody wanted and nobody voted for. Can he tell the House how many NHS managers have received a six-figure redundancy package as a result of his reorganisation?

David Cameron: What I can tell the right hon. Gentleman is that there are now 20,000 fewer administrative grades in the NHS, 5,500 more doctors in our NHS, 1,000 more midwives in our NHS and 1,000 more health visitors in our NHS. Let me tell him why that is the case: his shadow Health Secretary said that it would be irresponsible to increase spending on the NHS, and we rejected that advice. We rejected Labour. We invested in our NHS. We are proud of our NHS.

Edward Miliband: What the shadow Health Secretary did was warn against cutting social care, and that is exactly what the Government did. That is the crisis the Prime Minister has produced. Here is the answer to the question he did not answer: 2,300 managers have received six-figure payoffs—[Interruption.]

Mr Speaker: Order. There is too much noise. It had better stop, or the process will take longer. To those who cannot grow up I say: try.

Edward Miliband: The Prime Minister is giving P45s to nurses and six-figure payoffs to managers. Can he tell us how many of the people who have been let go from the NHS have been fired, paid off and then re-hired?

David Cameron: First, we are saving £4.5 billion by reducing the number of managers in our NHS. For the first time, anyone re-employed has to pay back part of the money they were given. That never happened under Labour. We do not have to remember Labour’s past record, because we can look at its record in Wales, where it has been running the health service. It cut the budget by 8.5%, it has not met a cancer target since 2008, and it has not met an A and E target since 2009. The fact is that the right hon. Gentleman is too weak to stand up to the poor management of the NHS in Wales, just as he is too weak to sack his shadow Health Secretary.

Edward Miliband: And we have a Prime Minister too clueless to know the facts about the NHS. Let us give him the answer, shall we? The answer is that over 2,000 people have been made redundant—[Interruption.] The hon. Gentleman says it is rubbish; it is absolutely true—we have a parliamentary answer from one of the Health Ministers. Two thousand people have been made redundant and re-hired, diverting money from the front line as this Prime Minister sacks nurses. [Interruption.] The Prime Minister seems to be saying it is untrue; well, if he replies he can tell me whether it is untrue. We know why the NHS is failing: his botched reorganisation, the
	abolition of NHS Direct, cuts to social care, and 6,000 fewer nurses. There is only one person responsible for the A and E crisis, and that is him.

David Cameron: We have taken 20,000 administrators out of the NHS—and I am not going to take lectures from a Government who saw patients drinking out of—[Interruption.]

Mr Speaker: Order. Members are shouting at the tops of their voices at the Prime Minister, and they must stop doing so.

David Cameron: Let me give the right hon. Gentleman the facts about the NHS under this Government: mixed-sex accommodation down by 98%, 1.2 million more people treated in A and E, and half a million more in-patients. We are doing all that, and we are not following Labour’s advice, which was to cut the NHS. That is the truth under this Government—the NHS getting better. Labour would have cut it, and Labour never stands up for the NHS.

Edward Miliband: What the whole country will have heard today is a Prime Minister complacent about the A and E crisis and clueless about what is actually happening in the NHS. What the British people know is that the NHS is heading into winter with fewer nurses, a lack of senior A and E doctors, and a shortage of beds. He promised he would protect the NHS, but it is now clear that the NHS is not safe in his hands.

David Cameron: Once again, the right hon. Gentleman is just wrong on the facts. Let me give him a simple fact: there are more A and E consultants working in A and E than there were five years ago. That is why we are meeting our targets in England and that is why Labour is missing its targets in Wales. I am clear that my job is to stand up for the NHS and deliver a stronger NHS—when is he going to understand that his job is to stand up to the bully boys of Unite and show some courage?

Marcus Jones: Over the past week we have heard about the Unite union’s attempts and strategy to disrupt business supply chains. Given the Government’s push for inward investment, what signal does the Prime Minister think Unite’s action sends around the world to businesses looking to invest in Britain?

David Cameron: This sort of industrial intimidation is bad for Britain, and it very nearly cut off petrol supplies to a large part of our United Kingdom. Every week the Leader of the Opposition comes here calling for an inquiry into this, an inquiry into that—he never stops calling for public inquiries, but he has not got the guts to hold one of his own into Unite.

Angus Robertson: People watching these exchanges today will be struck that when nearly 1,800 people have learned that they are to lose their jobs, neither the Leader of the Opposition nor the Prime Minister has seen fit to raise it thus far. I hope that the Prime Minister’s thoughts are with the families of people who are set to lose their jobs. Will he confirm that he agrees with the BAE statement that Glasgow is the best place to build frigates?

David Cameron: I do think this is a vitally important issue, and that is why the Defence Secretary will be making a statement right after Prime Minister’s questions. These are extremely difficult decisions, and our first thoughts should be with all those who are affected. Frankly, I was surprised that the Leader of the Opposition did not choose to raise this vitally important issue.
	Let us be clear about what we need to do here. We want our Royal Navy to have the best and most modern ships and the best technology, and that means we will go on building warships on the Clyde. We will be announcing three new offshore patrol vessels, keeping that yard busy rather than paying it to remain idle, as the previous Government proposed. In Portsmouth, yes, there will be job reductions, but there are many more people involved in ship servicing than in shipbuilding, so the work force will go from 12,000 to 11,000. But no one should be in any doubt of two things. Under this Government, we will have aircraft carriers, Type 45 destroyers, the new frigates, and the hunter-killer submarines; and there is something else they should know: if there was an independent Scotland we would not have any warships at all.

Graham Brady: As we approach Remembrance Sunday and the centenary of the first world war, will the Prime Minister join me in commending the work of the Victoria Cross Trust? Will he consider how the Government might assist the trust in its important task of restoring and maintaining the graves of some of the nation’s bravest soldiers, sailors and aircrew?

David Cameron: I pay tribute to my hon. Friend for his support for the Victoria Cross Trust and the hard work that he has done. I welcome any initiative that commemorates those who have given their lives in the defence of our country. Many Victoria Cross holders’ graves fall under the protection of the Commonwealth War Graves Commission. We will continue to work with the Commonwealth War Graves Commission and the Victoria Cross Trust to do everything possible to ensure that those people are remembered properly.

Heidi Alexander: Page 47 of the Tory party manifesto says:
	“We will stop the forced closure of A&E and maternity wards, so that people have better access to local services”.
	How is that going, Prime Minister?

David Cameron: There are no changes to services unless they are supported by local GPs. That is completely different from what happened under Labour, when there were top-down closures of hospitals. That is not happening under this Government.

Damian Collins: According to Unite, it is
	“increasingly recognised that…bullying, harassment and violence are a major problem throughout industry.”
	Does the Prime Minister agree that the authorities should always investigate allegations of harassment against employees and their families, including when the allegations involve the members of a trade union?

David Cameron: My hon. Friend is absolutely right. The allegations of industrial intimidation are serious and need to be looked at properly. Because the Labour party is ducking its responsibilities, we will have to consider what we can do to look at the matter. The leader of the Labour party is behaving like the mayor of a Sicilian town towards the Mafia: “They put me in and I don’t want them to take me out.”

Jim McGovern: Last month, I asked a question about zero-hours contracts. I think most hon. Members would agree that the response that I received was a fudge about the determination of employers and employees. I will put it plainly and simply to the Prime Minister: how many people in this Palace and in the Government buildings are employed on zero-hours contracts?

David Cameron: I do not have those figures to hand. What I can tell the hon. Gentleman is that we are having a review of zero-hours contracts. We are looking particularly at people on zero-hours contracts who are forbidden from working for other employers. This Government will look at the matter. The last Government, who saw zero-hours contracts go through the roof, did absolutely nothing about it.

Mark Reckless: The Prime Minister and his Chancellor closed the gaping loophole left by the last Government that allowed the rich to avoid stamp duty. Is it not time to close the other disgraceful loophole that they left, which allows overseas residents to buy up the best housing in London without paying capital gains tax?

David Cameron: My hon. Friend makes an important point. The stamp duty change that we made is vital in ensuring that foreign buyers pay stamp duty in London. That needed to happen. [Interruption.] The shadow Chancellor, who was the City Minister when all these things went wrong, is shouting his head off as usual. It is this Government who have insisted that people pay the taxes that are due.

Paul Goggins: The Prime Minister is right to extend supervision to prisoners with short sentences and to look for new ways to reduce reoffending, but he must be aware of the growing concern that his Government’s plans will fatally undermine the probation service. Now that a criminal investigation has been opened into G4S and Serco, will he sit down with his Justice Secretary, reconsider the options and at least trial the payment-by-results proposal to see whether it works?

David Cameron: The right hon. Gentleman has huge experience in this area. I welcome what he says about the importance of ensuring that there is probation support for people as they leave prison, which will happen under the plans that we are putting in place. I think that payment by results can make a big difference in reducing reoffending. The cruel fact is that half of all prisoners are back in prison within two years. It is time to try a different approach and that is what the Lord Chancellor is doing.

Chris Kelly: Manufacturing business Petford Tools in my constituency accessed the regional growth fund earlier this year, creating 23 jobs as a result. Will my right hon. Friend join me in congratulating managing director Melvin Sinar and major customers Jaguar Land Rover, Bentley and JCB on that success, and consider visiting the company with me on his next visit to the black country?

David Cameron: I would be delighted to make that visit with my hon. Friend. I have made visits with him in the past to look at what is happening in the black country in terms of greater job opportunities. That is part of the picture of a country where there are 1.4 million more people in private sector employment. In spite of the predictions that we would lose jobs, 1 million more people are in work in Britain today.

Pat McFadden: It is the first duty of any Government to protect the public. Since the Prime Minister decided deliberately to downgrade the country’s anti-terror laws, two suspects have used their Government-granted freedom to escape, the latest one clad in a burqa. Will the Prime Minister admit that that decision was a hugely irresponsible mistake, and in particular will he revisit the sunset clause that will lift the remaining regime on the remaining suspects in January?

David Cameron: I do not accept what the right hon. Gentleman says. The facts are these: under the control order regime, seven people absconded under control orders. Control orders were being endlessly hacked away at by the courts, so we needed to put a new system in place—a system that has the confidence of the police and the security services. Of course we will look at every single thing we can do to make sure the system is as good and robust as it can be, but we in this House should be frank that we are dealing with people who we are not able to charge and lock up, many of whom we would like to throw out of our country but currently cannot. We have to have some sort of regime like this, but we will do everything we can to make it as robust as possible.

David Morris: Will my right hon. Friend the Prime Minister join me in congratulating DST Engineering in Morecambe? It exports and fabricates metal products throughout the world and has contributed to the 15% drop in youth unemployment in my constituency. Overall, unemployment has fallen by 10% in the past three months alone. Is that not in stark contrast to the gloomy economic predictions of the Labour party, and will my right hon. Friend visit DST Engineering with me?

David Cameron: My hon. Friend does an excellent job standing up for the people of Morecambe, and across the north-west private sector employment is up by 45,000 since 2010. The number of people claiming jobseeker’s allowance is down by 29,000. He is right that the Labour party predicted we would lose 1 million jobs, but the answer is the complete opposite. There are 1 million more people working in our country, and it is about time Labour apologised for prediction after prediction being wrong.

Tom Blenkinsop: Last month, Tory councillor Abdul Aziz was at an invite-only party at No. 10. Councillor Aziz is subject to an arrest warrant in Pakistan in connection with a brutal murder. After shaking this man’s hand and having photos taken at No. 10 with this gentleman, would the Prime Minister now like to say that he thinks he should return to Pakistan and face justice?

David Cameron: I am looking carefully into this case and I will write to the hon. Gentleman.

Peter Tapsell: May I ask the Prime Minister whether he is of the opinion that the intelligence services of some countries may be dangerously out of political control? Is he confident that he is kept fully informed of all sensitive external initiatives taken by our services?

David Cameron: I do not want to break the rule of not commenting on intelligence issues, but to answer my right hon. Friend’s question as directly as I can, I have looked very carefully at the governance that we have in the UK for our intelligence services, the work of the Intelligence Services Commissioner and the Intelligence and Security Committee, and the oversight, particularly by the Home Secretary and the Foreign Secretary. I think we have a good system in our country, and to answer my right hon. Friend’s question, yes, I am fully involved in these decisions.

Angela Smith: Two years ago, the Prime Minister rightly agreed that extra resources should be made available to assist in the search for Madeleine McCann and yet, only months later, he turned down a similar request from Kerry Needham, my constituent, whose son Ben is still missing after 22 years. Will the Prime Minister please think again and respond positively to my recent letter to him by making extra resources available to help a desperate mother to search for her son?

David Cameron: This is an absolutely heartbreaking case—the whole country has followed it over the years. I will look carefully at the letter the hon. Lady has written to me. Obviously, it is important that the police make such decisions themselves. Governments should always stand by to help, which is what happened in the Madeleine McCann case, but I will look at what the hon. Lady says and see what I can do.

Mike Hancock: Will the Prime Minister elaborate on his earlier statement on what the Government will put in play in terms of mediation and mitigation of the dreadful effects of the 940 core jobs at BAE in the dockyard in Portsmouth, and the many thousands of jobs in its supply chain, that are going? I should be grateful if he would expand on that fairly rapidly.

David Cameron: I will expand a little but leave the Defence Secretary to give a detailed answer. As I have said, what is happening in Portsmouth is this: the current work force of 12,000 in defence-related and shipbuilding activities will go down to 11,000. The Ministry of Defence will invest £100 million in Portsmouth in vital
	ship-servicing work. As the hon. Gentleman knows, many more people have been involved in ship servicing than in shipbuilding. Of course, some of the largest and best-equipped warships we have ever had in our country will be based and hosted at Portsmouth—the two aircraft carriers and the Type 45 destroyers in particular—which will mean a lot of work for Portsmouth and for our naval base there for many, many years to come.

John Cryer: Many women face discrimination at work when they become pregnant, so how will charging them £1,200 to go to an industrial tribunal help them? Before the Prime Minister has another attack of the Lyntons and starts talking about all the dreadful trade unionists on the Opposition side of the House, I should like to make it clear that I am a trade unionist and damn proud of it.

David Cameron: Millions of people in our country can be very proud of being trade unionists. The problem is that they are led so badly by bully-boys—[Interruption.] They are led so badly by people who seem to condone intimidating families, intimidating witnesses and intimidating the Leader of the Opposition. That is what we have come to with Unite. They pick the candidates, choose the policy, pick the leader and bully him till they get what they want.

Mr Speaker: Order. Actually, I think the question was about tribunals, if memory serves. [Interruption.] No. It is a good idea to try to remember the essence of the question that was put.

Charlotte Leslie: Judicial reviews can be valuable in enabling communities to have their say, but what steps is the Prime Minister taking to prevent what is happening in Bristol, where a small, unrepresentative group is using judicial review, costing the local taxpayer thousands of pounds, to prevent the building of a badly needed stadium for Bristol Rovers football club, which Bristolians badly want, and which would bring game-changing benefits to our city?

David Cameron: My hon. Friend has been campaigning very hard and relentlessly to provide Bristol Rovers with the ground they need. I commend her for that. Obviously, there has been an issue with judicial reviews. Judicial reviews play a role in holding the Government to account, but I share her frustration that judicial review has become something of an industry. We need to fix that and have taken a series of steps to try to do so.

Several hon. Members: rose—

Mr Speaker: Order. I call Mr David Winnick—[Interruption.] Order. Can we have a bit of hush and a bit of courtesy? The hon. Gentleman happened not to hear me call him, which is perfectly understandable.

David Winnick: One of the domestic objectives of the second world war was to bring about a fairer society in Britain. Is the Prime Minister aware how wrong it is for him and the Chancellor, who have never had any form of financial insecurity, to pursue policies that hit the most hard-pressed and most vulnerable—the millions of
	people in our society, many of whom are on low pay, who find it difficult to feed and clothe their children? What is happening is totally unacceptable, and I find it contemptible.

David Cameron: What I would say to the hon. Gentleman is that we have taken 2.4 million of the poorest people in our country out of income tax altogether. The figures simply do not fit with the story he is trying to tell. Inequality is at its lowest level since 1986—fact. The pupil premium is directing more money to the poorest children in our schools—fact. Applications from disadvantaged children to universities have gone up, not down—fact. There are fewer workless households—[Interruption.] I am keen to answer the question, and it is a very direct answer. Workless households down by 425,000, payday lending regulated properly for the first time and, yes, a proper consultation on zero-hours contracts—those are the actions that we are taking to build a fairer country and instead of complaining about them, the hon. Gentleman should be backing them.

Peter Bone: On 3 September I wrote to the prisons Minister requesting a meeting to discuss the future of HMP Wellingborough. I received no response to that request. This week, I received a letter from the prisons Minister saying that the site of Wellingborough prison was to be sold. I do not understand that, as Wellingborough prison was the third cheapest in the country to run. Would the Prime Minister meet me and concerned constituents to discuss the matter?

David Cameron: What I will do is arrange very quickly for my hon. Friend to have that meeting with the prisons Minister that he asked for, so that he can discuss the future of the prison estate. It is important that we modernise it and make sure that we get good value for money for the people whom we keep in prison, and for the taxpayer.

Sharon Hodgson: The Prime Minister has just been boasting again about 1 million extra jobs. Can he therefore explain why in my constituency the number of people unemployed for more than two years has risen by 350% in the last year alone? It is now the worst figure in the country. Nine of the 10 worst constituencies on this measure are in the north-east, including all three Sunderland seats. Is that because they are the same old Tories, who do not care about the north-east?

David Cameron: We are seeing across our country, including in every region, more job opportunities, more people involved in our private sector and the claimant count coming down. In the north-east, for example, we have the new Hitachi factory, which will make a real difference, and the expansion of Nissan, which is doing extremely well. But I totally accept that we need to do more to keep our economy growing, to keep people employed and to grow the number of jobs. I am certain about one thing: we will not do that if we put up borrowing or taxes. The fact is that today Labour is the greatest risk to our recovery.

Robert Smith: Can the Prime Minister confirm that in the review of levies on energy bills the fairness of the
	funding process will be the priority, and that the Government still support vital measures to insulate people’s homes to ensure that the fuel-poor can keep their houses warmer in winter?

David Cameron: Of course we want to see insulation programmes and of course we want to help people, especially vulnerable households, to keep their bills down. But we should be looking at every subsidy and every levy and ensuring that it is value for money and that it is not in place for a moment longer than it is needed.

Alison McGovern: The Chancellor of the Exchequer would not answer this question yesterday, so let me give the Prime Minister a try. How many of the so-called new private sector jobs that he crows about are people on zero-hours contracts?

David Cameron: I do not have the figure for that, but the fact is that there are more people at work in our economy than ever before, two thirds of those jobs have been full-time jobs, and while we are on the subject of pay, perhaps it is a good moment to recognise that Labour-controlled Doncaster does not pay the living wage, whereas Conservative-controlled London does.

Peter Luff: On a difficult day for UK shipbuilding, is it not more important than ever to tell our young people that modern engineering offers varied and rewarding careers, and that we urgently need many more engineering apprentices and graduates—the message both of this week’s “tomorrow’s engineers” week, and of Monday’s report from the Department for Business, Innovation and Skills chief scientist, Professor John Perkins?

David Cameron: My hon. Friend is right about that, and he has campaigned long and hard to encourage respect for engineering and for more young people to study engineering. We are seeing a growth in the number of young people studying engineering, but it is true that there are still engineering jobs on the skills shortage list of the Migration Advisory Committee. That is a rebuke to our country, and we need to get more young people studying maths and science at school and more people studying engineering at our universities.

Susan Elan Jones: Last year, bankers’ bonuses grew 91% faster than wages for ordinary working people, despite the Prime Minister’s assurances that this would not happen. Will the Prime Minister tell us: is he unwilling to act or just a bit useless at being Prime Minister?

David Cameron: The point the hon. Lady should bear in mind is that bonuses were 85% higher when the shadow Chancellor was sitting in the Treasury. It is this Government who are making sure that people—[Interruption.]

Mr Speaker: Order. I want to hear the Prime Minister’s answer, and so does the House.

David Cameron: In fact, we inherited a situation where cleaners were paying higher tax rates than the hedge fund managers they were working for. If the hon. Lady wants to see someone who is useless, she should look at her own Front Bench.

Aircraft Carriers and UK Shipbuilding

Philip Hammond: With permission, Mr Speaker, I would like to make a statement on the future shipbuilding programme for the Royal Navy and, in particular, the aircraft carrier project.
	As the House will know, the previous Government entered into a contract with the Aircraft Carrier Alliance, an industrial consortium led by BAE Systems, to build two 65,000-tonne aircraft carriers—the largest ships in the Royal Navy’s history. In the strategic defence and security review 2010, the incoming Government, faced with the challenge of dealing with a £38 billion black hole in the Ministry of Defence budget, was advised that under the terms of the contract it would cost more to cancel the carriers than to build them. The Public Accounts Committee has subsequently described that contract as “not fit for purpose” and identified, in particular, the misalignment of interests between the MOD and the contractors, manifested in a sharing arrangement for cost overruns which sees, at best, 90p of every pound of additional cost paid by the taxpayer, and only 10p paid by the contractor, as the root cause of the problem.
	I agree with the PAC’s analysis. In 2012, I instructed my Department to begin negotiations to restructure the contract better to protect the interests of the taxpayer and to ensure the delivery of the carriers to a clear time schedule and at a realistic and deliverable cost. Following 18 months of complex negotiations with industry, I am pleased to inform the House that we have now reached heads of terms with the alliance that will address directly the concerns articulated by the PAC and others. Under the revised agreement, the total capital cost to Defence of procuring the carriers will be £6.2 billion, a figure arrived at after detailed analysis of costs already incurred and future costs and risks over the remaining seven years to the end of the project. Crucially, under the new agreement, any variation above or below that price will be shared on a 50:50 basis between Government and industry, until all the contractor’s profit is lost, meaning that interests are now properly aligned, driving the behaviour change needed to see this contract effectively delivered.
	The increase in the cost of this project does not come as a surprise. When I announced in May last year that I had balanced the defence budget, I did so having already made prudent provision in the equipment plan for a cost increase in the carrier programme above the £5.46 billion cost reported in the major projects review 2012 and I did that in recognition of the inevitability of cost-drift in a contract that was so lop-sided and poorly constructed.
	I also made provision for the cost of nugatory design work on the “cats and traps” system for the carrier variant operation and for reinstating the ski-jump needed for short take-off and vertical landing operations. At the time of the reversion announcement, I said that these costs could be as much as £100 million; I am pleased to tell the House today that they currently stand at £62 million, with the expectation that the final figure will be lower still.
	Given the commercially sensitive nature of the negotiations with the Aircraft Carrier Alliance, I was not able publicly to reveal these additional provisions in
	our budget, since to do so would have undermined our negotiating position with industry. However, the MOD did inform the National Audit Office of these provisions, and it is on that basis that it reviewed and reported on our 10-year equipment plan in January this year.
	I am therefore able to confirm to the House that the revised cost of the carriers remains within the additional provision made in May 2012 in the equipment plan; that as a result of this prudent approach, the defence budget remains in balance, with the full cost of the carriers provided for; and that the centrally held contingency of more than £4 billion in the equipment plan that I announced remains unused and intact, 18 months after it was announced.
	In addition to renegotiating the target price and the terms of the contract, we have agreed with the Aircraft Carrier Alliance to make changes to the governance of the project better to reflect the collaborative approach to project management that the new cost-sharing arrangements will induce and to improve the delivery of the programme. The project remains on schedule for sea trials of HMS Queen Elizabeth in 2017 and flying trials with the F35B commencing in 2018.
	Overall, this new arrangement with industry will result in savings of hundreds of millions of pounds to taxpayers, and I pay tribute to the team of MOD officials, led by the Chief of Defence Matériel, who have worked hard over a long period of time to deliver this result.
	In reviewing the carrier project, we also reviewed the wider warship-building programme within the context of the so-called terms of business agreement, or TOBA, between the MOD and BAE Systems signed in 2009 by the last Government. As the House will know, we remain committed to the construction of the Type 26 global combat ship to replace our current Type 23 frigates, but the main investment approval for the Type 26 programme will not be made until the design is more mature, towards the end of next year.
	There is, therefore, a challenge in sustaining a skilled shipbuilding work force in the United Kingdom between the completion of construction of the blocks for the second carrier and the beginning of construction of the Type 26 in 2016. Under the terms of the TOBA, without a shipbuilding order to fill that gap, the MOD would be required to pay BAE Systems for shipyards and workers to stand idle, producing nothing while their skill levels faded. Such a course would add significant risk to the effective delivery of the T26 programme, which assumes a skilled work force and a working shipyard to deliver it.
	To make best use of the labour force, therefore, and the dockyard assets, for which we would anyway be paying, I can announce today that we have signed an agreement in principle with BAE Systems to order three new offshore patrol vessels for the Royal Navy, based on a more capable variant of the River class and including a landing deck able to take a Merlin helicopter. Subject to main-gate approval in the coming months, these vessels will be constructed on the Clyde from late 2014, with the first vessel expected to come into service in 2017.
	The marginal cost of these ships, over and above the payments the MOD would anyway have had to make to keep the yards idle, is less than £100 million, which will be funded from budget held within the equipment plan
	to support industrial restructuring. This order is good news for the Clyde. It will sustain around 1,000 jobs as the carrier construction work reaches completion, secure the skills base there and ensure the ability to build the Type 26 frigates in due course, while turning the MOD’s liabilities under the TOBA into valuable capability for the Royal Navy.
	I turn now to the final part of this statement. The House will be aware that, this morning, BAE Systems has announced plans to rationalise its shipbuilding business as the surge of work associated with the carriers comes to an end. Regrettably, that will mean 835 job losses across Filton, the Clyde and Rosyth, and the closure of the company’s shipbuilding yard in Portsmouth. The loss of such a significant number of jobs is, of course, regrettable, but was always going to be inevitable as the work load associated with the carrier build came to an end.
	I want to pay tribute to the men and women on the Clyde and in Portsmouth who have contributed so much to the construction of the Royal Navy’s warships—including, of course, the Queen Elizabeth class carriers. BAE Systems has assured me that every effort will be made to redeploy employees, and that compulsory redundancies will be kept to a minimum. The company is now engaged in detailed discussions with the unions representing the work force in Portsmouth and on the Clyde.
	I know that the loss of shipbuilding capability will be a harsh blow to Portsmouth. The Government and the city council, together with Southampton, are in discussions about a city deal package for the area, to boost growth and jobs in the local economy. We expect to be able to make an announcement on that shortly. I can also announce that Admiral Rob Stevens, the former chief executive of the British Marine Federation, will chair a new maritime forum to advise the Solent local enterprise partnership on its maritime vision.
	Despite the end of shipbuilding activity, Portsmouth will remain one of two home ports for the Navy’s surface fleet, and will continue to undertake the vital support and maintenance work that sustains our most complex warships, including the Type 45 destroyers and, of course, the aircraft carriers themselves. Indeed, with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s, sustaining a total of around 11,000 jobs in the dockyards and related activities. To support this level of activity, I can announce today an investment of more than £100 million over the next three years in new infrastructure in Portsmouth to ensure that the carriers can be properly maintained and supported.
	The Chair of the Public Accounts Committee has previously described the carrier programme as
	“one of the most potent examples of what can go wrong with big projects in the public sector”.
	That is the legacy that this Government inherited: a carrier contract that was not fit for purpose and a TOBA that would have required the MOD to pay BAE Systems to do nothing while our shipbuilding skills base faded away. These announcements today put that legacy behind
	us. They will secure the future of British warship building, set the aircraft carrier project on a new path with clear alignment between industry and the MOD, and deliver important new capability in the form of offshore patrol vessels for the Royal Navy. I commend this statement to the House.

Vernon Coaker: I thank the Secretary of State for his courtesy in providing me with early sight of his statement. It is with a heavy heart that I, and I think all Members, listened to what he had to say. However, it was important that he came to the House today, and I am glad that he did so. Let me say at the outset that when the Government do the right thing on defence, especially when difficult decisions need to be taken, they will have our support. We will always say and do what we believe to be in the interests of Britain and its people. These are complicated and detailed matters, and it will take some time to examine the consequences of today’s announcements by BAE Systems and the Government.
	The Secretary of State focused today on the aircraft carrier programme. May I remind him that his party supported that programme? From what he was saying, that might have been difficult to believe. He also talked about the start of the Type 26 programme and the interim work. I will return to those subjects in a moment.
	My first thoughts, and those of all hon. Members, are with the employees who are facing job losses today, and with their families and the communities in which they live. Britain’s shipbuilders are the best in the world. They have proved that over decades and even centuries, and this is a difficult day for all those people who take pride in our maritime prowess and the history of our nation. Will he join me in praising those who give such great and dedicated service to our country?
	What discussions has the Defence Secretary’s Department had with the Department for Business, Innovation and Skills about providing support to ensure that the unique abilities of our skilled work force, particularly in Portsmouth, are not lost? I do not mean over the last week or a number of days; I mean over the last three and a half years of this Government. It seems to me that it is only since news of the potential job losses were leaked out that the Government have given any thought to this matter. In fact, in February 2012, the White Paper, “National Security Through Technology”, said that the MOD
	“does not consider wider employment, industrial, or economic factors in its value-for-money assessments.”
	Does the right hon. Gentleman still agree with that statement?
	Will the Defence Secretary join me in praising the role of the trade unions which have worked closely with the company and have approached these very serious issues with maturity and shown leadership in representing their members across the whole of this United Kingdom? Will he confirm that the Government need to use this opportunity to set out a clearer path to help the UK-based defence industry play its part in modernising both our industrial base and our equipment programme? Does he agree that a strong UK defence industry can be both responsive to the changing threats we face, as well as be part of a vibrant, advanced and high-skilled private sector, stimulating jobs and growth?
	The Secretary of State made much of his repeated claim that the Government inherited a £38 billion black hole. That figure does not stand up to scrutiny. He has never explained how he got to that figure and it has never been accepted by any credible organisation, including the National Audit Office, which said it was impossible to arrive at such a figure. Can he tell us how he arrived at that figure and what assumptions he used to produce it?
	On the aircraft carriers, the Secretary of State has trumpeted the new agreement to split 50:50 with the industry any overrun on the target cost. Will he confirm that any new changes by the MOD, such as the debacle over the “cats and traps” for fighter jets, which were changed and changed back again—the right hon. Gentleman now says it wasted only £62 million—will be fully met by the MOD? The fact that future costs will be split 50:50 is welcome. Most of the risk has already passed, as evidenced by the fact that the anticipated cost of the programme has almost doubled. And, of course, the 50% that the Government will meet still runs to hundreds of millions of pounds. It does not take an accountant to work out that 50% of £800 million—the reported rise in costs this week—is a lot of money for the taxpayer. Will he confirm that he expects no further rises in the cost of the aircraft carriers?
	The cost of the restructuring that has been outlined will be borne by the Ministry of Defence. Will the Secretary of State tell us how much that will be and how it will be paid for?
	We welcome the fact that skills will be maintained by the development and construction of the three offshore patrol vessels announced by the Defence Secretary today. Will he give a little more detail about how much these will cost, and will he outline what plans he now has for the second aircraft carrier and whether it is his intention to mothball it?
	There has been a lot of conjecture about the role that the politics of the Scottish referendum played in the decision to keep shipbuilding in Govan. Will the Secretary of State confirm, as I and everyone else believe, that today’s decisions were taken on the basis of what is in Britain’s best interests and what will sustain the skills of the work force, thus maintaining the future of our shipbuilding industry and our country’s defence? Will he outline what safeguards are in place if Scotland votes to leave the United Kingdom? None of us want to see that, but we need to know what plans he has for all eventualities. We must retain a sovereign shipbuilding capability for this country.
	Finally, will the Defence Secretary join me in saying that whatever the difficulties we experience, this country is a proud maritime nation? We have a proud, dedicated Navy, serviced by a proud, dedicated shipbuilding work force. We must maintain that across the United Kingdom, and retain the ability to build the warships we will need to defend our island, protect our interests across the world and keep us secure. That is both a task and a duty for us all.

Philip Hammond: I appreciate the hon. Gentleman’s measured tone and I join him in congratulating once again the work forces on the Clyde and in Portsmouth on the excellent naval vessels that have been built for the Royal Navy over the last few years, including the carrier that remains in build.
	I know the hon. Gentleman is new to his post, but he is really going to have to check some of the history before he starts making sweeping statements. He tells me that when the carrier programme was announced, the cost was £3.6 billion. Almost as soon as it had been announced, the then Secretary of State announced a two-year delay, which the National Audit Office says drove a further £1.6 billion into the cost of the carrier. The largest single element of cost increase in this programme was a deliberate act by the then Labour Government to delay the project by two years.
	The hon. Gentleman asks me when we first engaged with the Department for Business, Innovation and Skills about the challenges of maintaining a skilled work force. He suggests that that has happened only in the last few days. I can tell him that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place on the Front Bench, sat down a year ago to discuss this subject and has been in discussions with the local authorities in the area for at least a year over how to deal with the challenges that these inevitable changes present.
	The hon. Gentleman asked me about the union response. I look forward to seeing the union response in full. I understand that, so far, the unions at national level have been constructively engaged with what they understand as being an effort to save the shipbuilding industry in the UK. They recognise that the level of employment in naval shipbuilding represented a surge around the carrier project that was never going to be sustainable in the long term. The challenge now is to protect the skills base as we downsize the industry.
	The hon. Gentleman asks me about the £38 billion black hole. We could have a very long conversation about that, but put simply, it is the difference between the projected budget available and the commitments that the previous Government had announced. I have set that out in detail. Because the hon. Gentleman is new to his post, I would be happy to write to him and set it out again for his benefit. I would be happy to discuss it with him at any time in the future.
	The hon. Gentleman asks about the consequences of the STOVL—short take-off and vertical landing—reversion. If we were to change the specification in the future, the MOD as the customer would, of course, have to accept the consequences, but we are confident that the design of the aircraft carriers is now mature. The mistake made in 2008—it was a small one—was that the contract was placed before the ship had been designed. Unfortunately—I kid my hon. Friends not—anybody who has ever tried to place a contract to build a house before the house has been designed will know that that is a licence to print money for the contractor.
	The hon. Gentleman asks whether I can guarantee that there will be no further rises on the £6.2 billion price. Of course I cannot give him an absolute guarantee, but I can tell him that with every pound of additional cost being shared as 50p for the Government and 50p for the contractors, we will at least have the contractor’s serious attention to try to maintain control over the project—something that we did not have under the contract construct that the last Labour Government left us.
	The hon. Gentleman asks how we have paid for the additional costs. If he had been paying attention to the statement, he would know that I told him that the full
	costs announced today were provided in the balanced budget equipment programme that I announced in May 2012.
	Yes, the hon. Gentleman is absolutely right that we are acting as the Government of the United Kingdom in the best interests of the whole of the United Kingdom, looking at where best to deliver Britain’s warship building capability in the United Kingdom in order to make it sustainable and cost-effective in the future.

James Arbuthnot: My right hon. Friend has said that “with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s”, which is excellent news. Does that mean that the Government have reached the entirely sensible decision to bring both carriers into service?

Philip Hammond: As my right hon. Friend knows, that decision will be made in the strategic defence and security review 2015. Whether the decision will be to bring the ship into service or to mothball it, it will be kept at Portsmouth.

Anas Sarwar: At the time of the Grangemouth crisis, the First Minister of Scotland said that we should not try to play constitutional politics with such a serious issue, and I hope that he applies the same principle now to what is a very concerning time for workers in Govan.
	I welcome the Secretary of State’s announcement of the new contract, but that will give little comfort to workers in Portsmouth, Govan, Scotstoun, and Rosyth who will be losing their jobs during this difficult period. Will the Government give us a pledge that they will work with employees throughout the United Kingdom who are affected by what he has announced, with the trade unions and with the company to ensure that those who have lost their jobs are supported, while also trying to find a sustainable long-term future for shipbuilding that will protect jobs and investment in the UK?

Philip Hammond: What I have announced today will provide that sustainable long-term future for shipbuilding. We have answered the $64,000 question of how we would bridge the gap between completion of the aircraft carrier blocks and the commencement of the Type 26 build programme by commissioning three additional ocean-going patrol vessels which will be built on the Clyde. We have a sustainable naval shipbuilding industry in the United Kingdom, as of today’s announcement.
	Of course it is regrettable that jobs will be lost. That is a function of the surge in the size of the industry that is needed to deliver these very large carriers. We will work across Government with the unions, communities and other stakeholders who will be affected to ensure that the transition is as smooth as possible.

Caroline Dinenage: The end of shipbuilding in Portsmouth is devastating for a community with a record of more than 800 years of proud service to the Royal Navy. Does the Secretary of State know when we shall hear of plans to help to ease the pain of this decision—particularly in relation to the city deal—and
	does he know what conversations have taken place with Portsmouth city council about the timing of today’s announcement?

Philip Hammond: My hon. Friend is, of course, right. As I acknowledged in my statement, the decision will be very hard for people in Portsmouth to accept. However, we should put this in context: 940 jobs will be lost, but 11,000 will remain in dockyards and related activity in Portsmouth, which will be the largest centre of surface maritime support in the United Kingdom—and that will continue into the future.
	We are engaged in discussions with both Portsmouth and Southampton city councils about the city deal proposal, and I am advised that a statement is likely to be made very soon, as soon as those negotiations have concluded.

Jim Sheridan: As a former shipyard worker, let me say on behalf of the men and women in our British shipyards that, although they take pride in what they build, they do not necessarily care what they are building. Those at BAE Systems must learn to explore the commercial market, because they will not be able to sustain the company if it is wholly dependent on MOD contracts.
	As for the question of industrial relations, we should contrast what is happening with the trade unions at BAE Systems with what has happened at Grangemouth. One employer respects its employees, and the other does not.

Philip Hammond: I am happy to report that relations in the shipbuilding industry between management and unions are good and constructive. The unions understand the challenge that the industry faces, and they have worked with the management to address it. That sometimes means that union officials must make tough decisions as well, because they know that the industry cannot be sustained at its current size.
	The hon. Gentleman alluded to the diversity of the shipbuilding industry. We hear a great deal about how shipbuilding will be sustained through the commercial market and the third-nation market, including the market for warships, but I am afraid I have seen no evidence to suggest that we are able to compete in what is a very aggressive global market for commercial shipping. I think that the shipbuilding industry in this country will be primarily dependent on Royal Navy orders placed in the United Kingdom, because of the sovereign requirement for us to have warship building capability.

Mike Hancock: Can the Secretary of State explain why it was decided to transfer the existing work that was commissioned in Portsmouth away from the yard, so that the employees there will have no opportunity to complete the construction of the aircraft carriers? Can he also assure us that the MOD will not seek to claw back any of the money that is made available to Portsmouth through the city deal?

Philip Hammond: Let me respond first to the question about the aircraft carriers. Today BAE Systems announced its plan for rationalising the industry, as it must do under the TOBA in order to sustain warship building capability in the future. The challenge for us is to bridge
	the gap between the completion of the carrier and the start of the Type 26 programme. By moving three carrier blocks to the Clyde, along with the manufacture of the OPVs, we shall be able to sustain warship building on the Clyde and to maintain its viability into the future.
	I should be happy to discuss the city deal negotiations with the hon. Gentleman, who, I know, is well acquainted with the affairs of Portsmouth city council. I understand that the MOD is prepared to make land available as part of an overall scheme which would create investment and employment opportunities in the city.

Ian Davidson: As the Member of Parliament who represents Govan Shipbuilders, I welcome the order that has been placed there for the OPVs. It is a great tribute to the skills, commitment and hard work of the work force, both management and staff. As one of my colleagues observed earlier, Govan is no INEOS.
	May I also point out that, given that this is an order from the Royal Navy, it would not have been available to a separate Scotland? Regrettably, the Minister seems not to have placed a firm order for the Type 26 frigates to be built on the Clyde. Will he confirm that that will not happen until we know the result of the referendum? Will he also confirm that work is being transferred from Portsmouth to Scotland in order to bridge the gap between the end of the aircraft carrier building programme and the beginning of the Type 26 programme ?

Philip Hammond: As I have just said to the hon. Member for Portsmouth South (Mr Hancock), the company intends to transfer three blocks to the Clyde so that the flow of work will be continuous until we are ready to cut steel on the OPVs at the end of 2014.
	We will not repeat the mistake that the last Government made with the aircraft carriers of placing an order for a ship that has not yet been designed. That would be like signing a blank cheque to BAE Systems. Much as I admire and appreciate that company’s contribution to both our economy and our defence, I have no interest in signing blank cheques to it.

Gary Streeter: I congratulate my right hon. Friend on the skilful way in which he has reshaped the aircraft carrier contract and protected the skills base in the United Kingdom. Will he confirm that, in shaping the special package of measures for Portsmouth—which I support—he has not taken work away from Plymouth dockyard, including the maintenance of ships or future base-porting of the Type 26?

Philip Hammond: Funnily enough, I anticipated the possibility of that question from my hon. Friend. I can assure him that nothing that I have announced today will have any direct impact on Plymouth.

Angus Robertson: I thank the Secretary of State for giving me advance sight of his statement, and commend him for making it today. It was originally to be made tomorrow, but I think it right for the shipyard workers and their families to have certainty, and I know that he has done the right thing.
	I am sure that the Secretary of State’s thoughts are with all shipworking families, many of whom are learning just a few short weeks before Christmas that their jobs are on the line. Earlier today, BAE Systems stated that the appropriate place for frigates to be built was Glasgow. Does he agree with that?

Philip Hammond: I am grateful to the hon. Gentleman, because his question has prompted me to acknowledge that my statement was made today in response to media stories which had created speculation that needed to be dealt with. I apologise to the Opposition for having to make the statement on an Opposition supply day.
	I am obviously not responsible for the statement made by BAE Systems, but the company’s judgment, on the basis of value for money, is that the Clyde is the best place in which to build the Type 26 global combat ship, and the MOD concurs with that judgment.

Nick Harvey: This is a sad day for Portsmouth, given its proud heritage of supporting the Navy, and the decision has been a bitter pill for the workers there and elsewhere to swallow. We owe them all our thanks. However, was there not a certain inevitability about the coming of a day on which these painful judgments would have to be made? Oversupply of naval shipbuilding capacity is a problem with which successive Governments have had to deal, and the TOBA gave BAE Systems the opportunity to make a commercial judgment. Will the Secretary of State confirm that the judgment was commercial rather than political? While I can see the elegance of placing the OPV contract on the Clyde, will other British shipyards get the opportunity to bid for this? It is a small enough job that plenty of them would be able to handle.

Philip Hammond: No, the contract will be placed under the overall umbrella of the terms of business agreement we have with BAE Systems, and, as I made clear in my announcement, we are effectively ordering the OPVs to soak up money we would have been paying in any case to have these yards standing idle, and in doing so significantly de-risking the start-up of the Type 26 programme by making sure the skills base remains in place in Glasgow.
	I share my hon. Friend’s view, however, that there is a certain inevitability about the announcement we have made today. Governments have put off the moment, and the carrier order represented a pretty massive 130,000-tonne postponement of the moment, but we cannot alter the inevitable fact that we do not have a large enough Navy to sustain a multi-yard shipbuilding industry in the UK.

John Denham: The record will show that the last Labour Government secured south-coast shipbuilding with a share of the destroyer order and then of the carrier programme. Today’s crisis has been coming for some time. Does the Secretary of State’s statement not confirm both that no effort has been made by the Government in the past three years to win extra orders for the Portsmouth shipyard and that work will be transferred from Portsmouth to other shipyards, hastening its closure? Does the Secretary of State understand why many in southern England feel they have been sold down the river today by a Government whose attention has been elsewhere?

Philip Hammond: No, and, frankly, travelling around the world in support of UK defence exports as I do, I should not be lectured by someone who was a Minister in the last Government, which completely neglected the UK defence industry—failed to travel and failed to engage with potential customers around the globe. That is a completely ludicrous suggestion from the right hon. Gentleman. It is not the Government’s job to win orders, whether for warships or aircraft. It is the Government’s job to support the industry in doing what it has to do, and we have been doing just that, and I can tell the right hon. Gentleman that I myself and my colleagues have visited countries as diverse as Brazil and Australia in pursuit of naval shipbuilding orders to support those yards.

Oliver Colvile: A strong Navy is good for both Portsmouth and Plymouth. May I urge my right hon. Friend to ensure that any changes to the TOBA will not hamper or do damage to Devonport in my Plymouth, Sutton and Devonport constituency? Will he also look at whether the other vessels that are being commissioned could potentially be base-ported in Plymouth?

Philip Hammond: No decision has yet been made about the location of the base port for the vessels I have announced today. Just to be clear, what this announcement will do is effectively suspend the TOBA for the duration of the period when the OPVs are being built and then see its final demise upon the placing of the order for Type 26 global combat ships. I hope we have seen the very last TOBA payment being made to the industry by the MOD.

Katy Clark: Politics is about choices, of course. What impact has the funding of the Trident replacement had on the decisions that have led to the announcements of job losses today?

Philip Hammond: None. The Trident programme is a capital programme. The constraining factor in terms of the Royal Navy is far more around operating costs and crewing than the capital costs of platforms. We have to make sure we have a Navy that is sustainable and that we can afford to operate and crew in an increasingly tight market for engineering skills, where we often have to pay premium rates to get people with the appropriate skills. There is no point in building platforms we cannot afford to put to sea.

Andrew Tyrie: The Secretary of State appears to have resolved a massive problem that he inherited, and he deserves our congratulations for that, although the closure of the Portsmouth yards will be a big blow for many of my constituents. Can he give an initial estimate of the likely scale of the compulsory redundancies and will he reiterate the assurance that he has already given once, that none of those jobs were lost to keep jobs in Scotland at a politically sensitive time?

Philip Hammond: I thank my hon. Friend for his comments. On the last point, the analysis of where best to build the Type 26 ships, which will have to be built to a very tight budget and a very tight timetable, was made by the company—endorsed by the MOD, but made by the company. I can tell him, as I think I said in the statement—
	or, certainly, as the Prime Minister said earlier on—that 940 job losses are anticipated at Portsmouth between now and the end of 2014 as a result of the decision to end shipbuilding. About 11,000 jobs in the dockyards and the supporting infrastructure will remain.

Sammy Wilson: There is a great affinity, of course, between Northern Ireland and Scotland, and many people will feel for those in the shipbuilding industry who are losing their jobs. Will the Secretary of State give us an assurance that, through procurement policies and the promotion of UK industry, everything will be done to keep the shipyards in Scotland viable, and does he agree that this decision shows that Scotland is far better-off within the United Kingdom than in having some kind of pseudo-independence?

Philip Hammond: The hon. Gentleman is exactly right about that last point. If Scotland were not a part of the United Kingdom, I would certainly not have been able to make the statement and announcement I have made today.

Mark Hoban: This is a sad day for Portsmouth, and many of my constituents work in the dockyard. My right hon. Friend will know that the shipbuilding facility is in the heart of the naval dockyard. Is it possible to look at the footprint of the naval dockyard to see how more land might be released from it to expand the commercial port and create opportunities for jobs and growth in the commercial sector?

Philip Hammond: I am grateful to my hon. Friend, and he is right that the shipbuilding hall that will now become unused as a result of the announcements today is inside the secure dockyard perimeter. There have been discussions about how that could be carved out, and how security arrangements could be changed to accommodate its use. This is, of course, primarily a matter for the company that owns the shipbuilding hall, but I can confirm to my hon. Friend that we are looking at all options to support employment-generating activity both in the dockyard and on MOD land adjoining it.

Frank Roy: This is a catastrophic day for the families of 835 shipbuilders, and the reality is that there will be more job losses. How many jobs does the Secretary of State estimate will be lost in the service sector for the shipyards?

Philip Hammond: I have not got an estimate of the number of jobs in the wider economy, but I can say this to the hon. Gentleman: when the carrier project was announced and the Type 45 destroyers were being built, everybody—including, I believe, the hon. Gentleman—understood that we were benefiting from a surge of work that was very welcome but that was never going to be sustainable in the long term. Of course the day when that work comes to an end is regrettable, and the consequent redundancies are difficult, but this is not something that has come unexpectedly; it is something that has long been understood and anticipated, and the announcement we have made today is good news for the Clyde, and I would have thought the hon. Gentleman would have wanted to welcome it.

Julian Lewis: Despite the Defence Secretary’s criticism of the contracts, does he accept that the restoration of carrier strike capability to the fleet is an absolute strategic necessity, and does he
	also accept that one reason for the loss of Portsmouth as a shipbuilder is that the last Government reduced the total number of frigates and destroyers from 35 to 19—and, regrettably, this Government have done nothing to reverse that?

Philip Hammond: My hon. Friend is factually correct: the last Government did, indeed, reduce the total number of destroyers to be built in the Type 45 programme, largely because of the hole that was opening up in the aircraft carrier budget due to the delay in the project that I mentioned earlier. He is right, too, that we can talk all day about the history of the placing of the order for these two very large ships—the largest ships the Royal Navy will ever have had—but the fact is that we are getting them: they are being built, and we are proud of them and we are going to make excellent use of them in projecting UK naval maritime power around the world.

Cathy Jamieson: The Secretary of State has repeatedly said that this day was expected, so what work has been done to look at diversification into other industries, particularly in the marine renewables sector, for these skilled workers? To follow up the point made by my hon. Friend the Member for Motherwell and Wishaw (Mr Roy), if that estimate of the knock-on effect has not been obtained, when will it be obtained?

Philip Hammond: As the hon. Lady probably knows, estimates of effects on the wider economy are never precise, although estimates can be made. I am happy to write to tell her our best estimate, but it will be just that—the best estimate. She will know that in Scotland the responsibility for wider industrial support and the promotion of employment opportunities rests with the Scottish Government, and I would expect them to be actively engaged in this programme.

George Hollingbery: I thank the Secretary of State for his statement, although of course it is not welcome news for a number of my constituents who work at the Portsmouth dockyard. Mr Speaker, I hope that you will allow me a moment to pay tribute to the efforts of my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who has worked tirelessly on this subject. She has spent an enormous amount of time trying to secure the future of shipbuilding in the UK and at meetings I have attended with her it seems that she has secured at least some change, in that the importance of the commitment to the new offshore patrol vessels should not be underestimated. She and I argued not only that we should build more warships, but that there should be regeneration support for the Solent area should the worst happen. We have got the former and it sounds as though we will get the latter. If so, will the Secretary of State ensure that the many small and medium-sized enterprises based in places such as my constituency and the others around Portsmouth are also able to access such support?

Philip Hammond: First, I am happy to join my hon. Friend in paying tribute to the tireless work that has been done by my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who, since I have known her, has talked about almost nothing but the shipbuilding
	industry in Portsmouth. Let me confirm for him that we will do everything we can to ensure that the support package for Portsmouth will be put together in a way that genuinely diversifies the local economy. That is what is needed now, and that includes support for SMEs. I will make sure that my right hon. and hon. Friends in the Department for Business, Innovation and Skills are aware of his comments.

Thomas Docherty: Given that BAE Systems has announced that there will be job losses at Rosyth and given the Secretary of State’s wider comments about ship maintenance, I am sure that he will be happy to have an urgent meeting with one of his Ministers and me to discuss the future of Rosyth. May I press him to say what will happen if Scotland chooses to become a separate nation in September next year? Will the Type 26 order stay on the Clyde?

Philip Hammond: The Type 26 order will not be placed until the design is mature, which will not be until towards the end of next year, and so the hon. Gentleman’s question is premature. A significant number of workers who are nominally based on the Clyde are being bussed on a daily basis to Rosyth to boost the work force during the carrier assembly phase, so the announcement made by BAE Systems should be read in that context. My understanding from Babcock is that the yard at Rosyth has a bright future with private sector work—offshore work—as well as with the programme to assemble both the Queen Elizabeth and the Prince of Wales, which itself will keep the yard busy until 2020.

Edward Leigh: Has Whitehall finally learned the lessons from what, from a public accounts point of view, must be one of the worst politically driven, stop-start contracts in our history? Will the Secretary of State assure us that never again will the Treasury insist on delaying a contract for one or two years to save money and end up with a cost of hundreds of millions of pounds more? Just so that the taxpayer knows exactly how much this has cost him, will the Secretary of State repeat what the carriers were supposed to cost originally and what they are now costing us, and when the planes were supposed to be flying operationally from them and when they will actually fly?

Philip Hammond: It is always a brave person who says that Whitehall has learned the lessons. I can certainly give my hon. Friend this commitment: as long as I am Secretary of State for Defence, we will not be placing any contracts for things that we have not designed and we will not be driving cost into projects by making announcements of delay that are simply driven by the exigencies of poor budgeting and poor financial control. He asked me to repeat the numbers. When the project was announced in 2008 it had a budget line attached to it of £3.6 billion, but of course when the previous Government first proposed the aircraft carrier project the budget was much less than that, at £2.25 billion. Nobody I have met, in the industry or in the Navy, ever believed the project could be built for £3.6 billion. There was a degree of fantasy accounting going on, the reasons for which I will leave my hon. Friend to speculate upon.

Pete Wishart: More than 800 jobs have been lost across Scotland today as a result of the Secretary of State’s announcement. He is absolutely right to say that we cannot play politics with this and we have to put aside the constitutional issues. One way in which he could do that, if he is sincere and honest about it, is to say today that he will respect the decision of the people of Scotland next year, and that regardless of which way they decide, he will honour all existing work and contracts.

Philip Hammond: What the hon. Gentleman has not heard is that the contract for the Type 26 cannot be placed until the design is mature, and that will not be until the end of 2014. The Scottish National party is nothing if not glass half empty; what I have actually announced today is that thousands of jobs have been saved, but he chooses to present it as though hundreds of jobs have been lost.

Tracey Crouch: Shipbuilding in Chatham ended 30 years ago and although the dockyard is a diverse business hub today, its closure left scars of devastation and deprivation on the town. When the Secretary of State is putting together his support package for the areas sadly affected by today’s announcement, will he look at the history of the closure of Chatham dockyard, learn the lessons and make sure that proper investment is made to ensure that these areas are not blighted as, unfortunately, Chatham was blighted?

Philip Hammond: I would be very happy to look at the history of Chatham. As my hon. Friend says, Chatham’s historic dockyard is now a thriving and vibrant location, attracting investment and employment, and that is what we want to make sure also happens in Portsmouth. Of course the point about Portsmouth is that it will continue to be a major naval port, with large-scale maritime support and maintenance activity going on; it will not become a historic port in the sense that Chatham has become one.

Alan Whitehead: Does the Secretary of State accept that shipbuilding on the south coast has already been consolidated by the removal of defence-related shipbuilding from Southampton to Portsmouth, by agreement? Does he also agree that the contract for parts of the carrier to be built in the naval dockyards in Portsmouth was very much part of that consolidation? Does he therefore accept that the removal of the aircraft parts manufacturing will be regarded as a substantial betrayal of all that consolidation effort? Does he consider it wise strategically to extinguish shipbuilding permanently on the south coast, leaving just one site for UK defence-related shipbuilding?

Philip Hammond: The hon. Gentleman is right to say that consolidation of the shipbuilding industry is not a single event; it is a process that has been going on for decades, and the absorption of VT by BAE Systems was part of it. I am afraid that the inexorable logic, given the size of the Royal Navy and the budget we have for building new ships, is that we can support only one naval shipbuilding location in the United Kingdom—anything else is fantasy economics.

Andrew Turner: One strength of the Isle of Wight’s economy is its historic involvement with shipbuilding; a number of my constituents work in the Portsmouth dockyard and many companies on the island are part of the supply chain. What assessment has been made of the impact of this announcement on the Isle of Wight’s economy?

Philip Hammond: I must confess to my hon. Friend that I have not assessed the impact on the Isle of Wight economy specifically. I know, however, that the local enterprise partnerships and local authorities have been aware of these challenges for some time. If it will help my hon. Friend, I will dig out what assessments have been made by others and draw his attention to them.

Angus MacNeil: Successive UK Governments have failed Scotland and have failed shipbuilding, against a background of more than 100 ships being built in Norway last year. The little that remains in Scotland, as we know from Lance Price’s diaries, is due only to a strong SNP and our independent state of mind. Does the Secretary of State agree with that reality?

Philip Hammond: No. The SNP’s policies would drive shipbuilding out of Scotland finally and would be the last nail in the coffin of the industry. Today, we have announced that the Clyde will effectively become the focus of the whole of the UK’s warship building industry, that we will move the remaining carrier blocks around to support that industry, and that we will place new contracts to support the yard and ensure that it maintains the skills to build the Type 26 class, and all the hon. Gentleman can do is stand up and carp. I think that people will draw their own conclusions.

Tobias Ellwood: Labour claims to support the British shipbuilding industry but, if memory serves, it was Labour that cut the Type 23 fleet by three, cut the Type 45 fleet by six orders and slowed down the new carrier order. Does the Secretary of State agree that if we are to assist our shipyards, one way to do it is to commit to operating both aircraft carriers rather than mothballing one of them in Portsmouth harbour?

Philip Hammond: Clearly, that decision will be made in the 2015 SDSR. My personal view is well known: I believe that having spent the best part of £3 billion on building the carrier, the £70 million-odd a year that will be required to operate it looks like good value for money.

Jim Shannon: I welcome the Secretary of State’s statement and his obvious commitment to shipbuilding. What assistance will there be to encourage the retention of shipbuilding skills through apprenticeships and will the opportunity for such apprenticeships be available to all the regions of the United Kingdom of Great Britain and Northern Ireland?

Philip Hammond: I cannot answer for any wider initiatives that my right hon. and hon. Friends in the Department for Business, Innovation and Skills might be introducing. The deal to which I have alluded today is a city deal that specifically relates to Portsmouth and Southampton, and therefore by definition it will make funding available for job creation and regeneration only in those areas.

Steve Brine: I thank the Secretary of State for his statement. He knows that there will be grave concern in my Winchester constituency about the shipbuilding element. Those further down the supply chain will be listening to his statement keenly, no doubt wanting to ask many questions and, I must say, given what is happening in Hampshire, choking on their lunch hearing the SNP representatives complaining about the announcement. May I echo the other comments that have been made and urge him to leave no stone unturned not just in Portsmouth but across the wider region in the pursuit of regeneration of the yard and the jobs it supports, even as far up as Winchester?

Philip Hammond: As a south-east MP, I understand well that not all of the south-east is affluent with high employment. There are areas that depend on specific industries which are as vulnerable as other areas anywhere in the country. I will endeavour to ensure that the points that my hon. Friend has raised are taken fully into account.

Peter Luff: I commend the Secretary of State, the Minister for defence equipment—the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne)—the Chief of Defence Matériel and all those involved for making the best of a very difficult situation. Will my right hon. Friend clarify the purpose and capabilities of the three new very welcome offshore patrol vessels?

Philip Hammond: They will be more capable than the existing River class, as they will be able to take a larger helicopter and will be 10 metres longer. They will be able to undertake a full range of duties, including not only fishery protection but the interdiction of smuggling, counter-piracy operations and the protection of our overseas territories.

Julian Brazier: I, too, pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) for her doughty struggle to get a good city deal for her constituents and for the vision for the OPVs that to my knowledge she has been outlining for at least two years. Will the Secretary of State confirm that the OPVs will to some extent provide a force multiplier for our frigate fleet? Some of the roles carried out by frigates do not require full frigate capability, so the OPVs could be a way of partially expanding that capability.

Philip Hammond: At the risk of causing her to blush, I am happy once again to praise my hon. Friend the Member for Portsmouth North. I should say to my hon. Friend the Member for Canterbury (Mr Brazier) that no decision has yet been taken about whether the old River class vessels will be retired after the new OPVs are brought into service. That decision will have to be made in SDSR 2015 based on the ongoing budget challenges of maintaining additional vessels at sea. That will be a decision for the Royal Navy.

Bob Stewart: Most people suggest that our biggest defence capability is not in maritime patrol aircraft. I am no expert—although I can see that there are many naval experts in the Chamber—but could this new River class OPV, with its enhanced
	length and helicopter deck, also be used to cover the gap between 240 nautical miles, the distance a land-based helicopter can go out from our shores into the Atlantic, and the 1,200 nautical miles for which we are treaty responsible? Could it perhaps play some sort of MPA role in that area?

Philip Hammond: I have not looked at the specification in detail, but I do not envisage that the thing will be able to take off and fly. I understand the point that my hon. Friend is making, however, and we are conscious of the gap in maritime patrol aircraft capability. It is one issue that will be addressed in SDSR 2015 and we will manage the gap in the meantime through close collaboration with our allies. We are considering all the options, including, potentially, the use of unmanned aerial vehicles in a maritime patrol role in the future.

Neil Carmichael: I congratulate the Secretary of State on salvaging a sustainable shipbuilding future for this country from the wreckage left by the previous Government. Looking to the future, and bearing in mind his comments about engineering, does he agree with me that we should be encouraging young people to think about entering the defence services as engineers to develop new technologies, including in electronics and composite materials?

Philip Hammond: Absolutely. I must say to my hon. Friend and for the record that there are huge opportunities available across the defence industry and in the defence establishment for young people with engineering skills. I am glad to say that all the evidence suggests that my right hon. Friend the Secretary of State for Education’s reforms are having the effect of reawakening the interest of young people in the STEM—science, technology, engineering and maths—subjects. Increasing numbers are taking them up and that is good news for the future of British industry.

Jason McCartney: David Brown Gear Systems from Lockwood in my constituency has secured a design contract for the new Type 26 global combat ship. As well as confirming the new time scale for the Type 26s, will my right hon. Friend say when we will know how many vessels will be ordered?

Philip Hammond: I have not confirmed the new timetable for the Type 26. It was always our intention that we would mature the design fully before we placed a contract, in order to avoid the mistakes of the past. The current planning assumption is that we will order 13 vessels.

Philip Hollobone: When we talk about aircraft carriers, we tend to focus on their construction, but, of course, when they become operational they will require trained crews. With which navies are we co-operating to train the requisite personnel and might there be expanded opportunities in places such as Portsmouth for onshore training in the run-up to deployment?

Philip Hammond: A certain amount of training can be done synthetically onshore, but I am grateful to my hon. Friend because he gives me the opportunity to reiterate publicly and on the record our gratitude to the United States navy and the United States marine corps,
	who are assisting us in keeping alive our carrier skills during a period when we are not operating fixed-wing aircraft off UK carriers. We have pilots and deck officers embedded in the US navy and the US marine corps and we will develop our fleet of F-35B aircraft, with the first operational squadron based in the United States at Eglin air base. It will return to the UK in 2017 as a trained squadron ready to stand up immediately on its arrival. Without that support from the US, we would be struggling to get back into the carrier business. We should be immensely grateful.

Unsolicited Telephone Calls (Caller Line Identification)

Motion for leave to bring in a Bill (Standing Order No. 23)

Alun Cairns: I beg to move,
	That leave be given to bring in a Bill to require disclosure of caller line identification by non-domestic callers; to require Ofcom to consider applications for exemption from such disclosure; to provide that telephone providers may not make a charge for providing caller line identification; and for connected purposes.
	The aim of the Bill is to help to reduce nuisance calls. The issue is significant and should not be underestimated. My constituents in the Vale of Glamorgan and others across the country are fed up with the menace of nuisance calls. They are annoyed about receiving unsolicited telephone calls trying to sell them gas or electricity that they do not want, or financial services or holidays in which they have little interest. They do not want to claim for mis-sold payment protection insurance on a loan that they never had, nor do they want to sue the local authority for an accident that never occurred or a buy a boiler from a company they have never heard of.
	My constituents are subject to frequent telephone calls offering those services and more against their will. BT reported that it received 50,000 calls in one month to its nuisance call bureau, yet only a fraction of that number of complaints is made formally to Ofcom or to the Information Commissioner’s Office. I suggest that that is because of the difficulty of the process, and a large part of that is due to the problem of identifying the marketing organisation that makes the call. Enough is enough. Credit must be given to the consumer organisation, Which?, which was amongst the first to highlight the problem. The Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), too, should take credit for taking significant steps to help to tackle the issue, leading to hefty fines for some companies levied by Ofcom and the Information Commissioner. More action needs to be taken, and legislation needs to be changed if that action is to occur. The Minister has made a commitment to publish a strategy document later this year, which shows the high priority that he gives to the issue.
	The all-party parliamentary group on nuisance calls published a report last week with 16 recommendations aimed at combating the problem. There were two key themes. The first focused on third-party consent, and my hon. Friend the Member for Edinburgh West (Mike Crockart), co-chair of the all-party parliamentary group, sought to make progress on that with his private Member’s Bill last Friday. The second theme relates to caller identification, which is covered by my Bill. The measure will help people to take action against such calls. It will enable them to complain effectively when a nuisance is caused that could lead to fines and penalties, subject to Ofcom and ICO investigation. It will also allow people to choose whether or not to answer the phone. My constituents want to live in peace and answer the telephone to friends, family and others to whom they choose to talk.
	Much of the difficulty derives from the fact that it is nearly impossible to tell who is calling, in spite of the fact that the caller ID facility is widely available. That is
	largely because marketing organisations choose to withhold their number. Legislation and guidance already exist to allow individuals to opt out of receiving marketing calls. Constituents can register with the Telephone Preference Service, effectively advising marketing companies that they are not permitted to call without prior consent. In theory, that should stop the vast majority of calls and allow complaints to be made against companies that break the code. However, it is almost impossible to complain about an organisation breaching the rules without knowing its identity. That is the position in which many constituents find themselves as a result of withheld numbers.
	Under the code, the organisation should identify itself at the outset of a call. However, if a company breaks the rules by calling a TPS-registered number in the first instance they are highly unlikely to adhere to the condition that requires identification to the person answering the call, particularly if that person is irritated.
	When the caller ID facility became available during the early ’90s a few organisations withheld their number. In general, that was limited to the police, medical organisations and charities such as those supporting victims of domestic violence. Now, however, a significant proportion of marketing organisations choose to withhold their number, making the choice of whether to answer the call almost impossible, but also making it extremely difficult to make a complaint to Ofcom or the ICO.
	One of my constituents, Mr Haynes from Cowbridge, simply refuses to answer any call when the number is withheld in the expectation that it is a marketing call. As a result, he could well be ignoring calls from his local police station or GP practice. I have also found it difficult to contact him from the parliamentary estate, because the parliamentary system withholds the telephone number.
	Requiring all non-domestic callers to display their numbers unless they have good reason not to do so, as in the examples I have already mentioned, will help people such as Mr Haynes and millions across the country to take action against those who call against the rules. In the Bill, I propose that Ofcom be required to consider applications for exemptions. The general rule should be that the organisation, whether public or private, would have to disclose their number unless there is a good reason why they should not do so. I have already mentioned the police and domestic violence charities, and there may well be others that need to be considered, but they should be seen as the exception rather than the general rule.
	The Bill requires telephone network operators to make the caller ID facility available free of charge. I was alarmed to hear some weeks ago that if a customer did not sign up to an annual contract two major UK telephone network operators would charge for adding that facility. That is simply unacceptable. It effectively charges a customer who has been plagued with nuisance calls to complain about breaches to the code. When the issue was scrutinised in the all-party parliamentary group’s evidence session, one operator sought to excuse the policy, and suggested that it could have arisen as a result of additional energy costs in displaying caller ID. We rejected that absolutely, and we received widespread support for doing so, including from mobile operators that provide the facility free of charge. I was pleased to hear Ofcom’s strong response, and I hope that operators will reflect on its comments, as well as those by all parties present at the all-party group.
	The Bill will make a significant difference to constituents across the country. It will allow responsible organisations that adhere to the respective codes to continue their work. It will put much of the control back in the hands of the receiver of the call. They can choose whether to answer it, and report breaches to the ICO or Ofcom. Of course, it may take time for the Bill to become law, but in the interim, I urge non-domestic callers to display their number voluntarily. It would be a simple action that would gain much respect from the public. In that vein, I appeal to network operators not to charge customers to use the caller ID facility and to review their policy. The impact of not doing so would be to charge customers to make a complaint about nuisance calls. Offering the facility would offer the network operator a marketing advantage.
	The Bill is a small part of helping to combat the issue of nuisance calls, and I am pleased to have the support of Members from all parts of the House, It is a Bill that has little financial consequence, but which could have a significant benefit for many of our constituents. Many of those who are at home during the day, particularly the elderly and the most vulnerable, are plagued by nuisance calls. I urge hon. Members to support the Bill.
	Question put and agreed to.
	Ordered,
	That Alun Cairns, Mike Crockart, Steve Brine, Fiona Bruce, Dr Julian Huppert, Steve Rotheram, Bob Stewart, Sir Andrew Stunell, Martin Vickers, Mr Mike Weir and Simon Wright present the Bill.
	Alun Cairns accordingly presented the Bill.
	Bill read the First time; to be read a Second time on Friday 28 February 2014 and to be printed (Bill 126).

Opposition Day
	 — 
	[10th allotted day]
	 — 
	Energy Price Freeze

Mr Speaker: I advise the House that no amendment has been selected.

Caroline Flint: I beg to move,
	That this House calls on the Government to freeze electricity and gas prices for 20 months whilst legislation is introduced to ring-fence the generation businesses of the vertically integrated energy companies from their supply businesses, to require all electricity generators and suppliers to trade their power via an open exchange, to establish a tough new regulator with the power to force energy suppliers to pass on price cuts when wholesale costs fall, and to put all over-75-year-olds on the cheapest tariff.
	At the heart of this debate is a question about whether we believe that people have been overcharged and let down by a regulator that has failed to do its job, and that to win back the trust of the British people we need to mend this broken market. Today we put before the House a motion that proposes two measures to provide real help now through a temporary 20-month price freeze and by putting all those over the age of 75 on the cheapest tariff, as well as deep structural reforms to the way that this market works for the future. These are the measures that we will take if we win the next election, but these are measures that this Government could take now, for which they would have our full support.

Albert Owen: In those structural reforms, does my right hon. Friend consider that Ofgem, the regulator, would have responsibility for those who are not on the mains gas grid?

Caroline Flint: My hon. Friend coined the term “energy island” to describe his island constituency of Anglesey and I know he takes a keen interest. We have already said in the House and elsewhere that we believe that those who are off-grid should come under our new regulator. Of those people who are off-grid, only 10% rely on oil for both their heating and their light. The rest have oil for heating but rely on electricity, so our price freeze would have an impact on many off-grid customers as well.

Several hon. Members: rose—

Caroline Flint: I will make a little progress, then I will be happy to give way.

Charles Hendry: Will the right hon. Lady give way?

Caroline Flint: I will make a little more progress.
	At the outset I want to deal with a few of the myths that the Government have resorted to peddling in the absence of any credible policies of their own and because they are confused about how to respond to our proposals. The first myth is that the price freeze cannot or will not happen or that the idea is a con. Let me tell the House that there is only one situation in which this price freeze will not happen: if the Conservatives or Liberal Democrats
	win the next election. If we are elected, this price freeze will happen. The idea that a price freeze will not work if wholesale prices increase is complete and utter rubbish.
	As the energy companies themselves admit, they are not buying today all the energy they need to supply their customers tomorrow. They buy their gas and electricity two, three or even four years before it is supplied, precisely in order to manage the risk of fluctuation in wholesale prices. The Secretary of State must know this, so the Government’s argument does not stand up.
	The second myth is that companies will undermine the freeze either by hiking up their prices beforehand or by increasing them afterwards, but as I asked the Secretary of State at the last Energy and Climate Change questions, if companies collude to increase their prices beyond anything that can be justified before the next election, will he stop them? If he will not, let me be clear: we will take action. As for what happens after the price freeze ends, the reason it lasts for 20 months is that that is how long we think it will take to enact our reforms to overhaul this market. By that point, we will have a new regulator in place, with the power to force companies to cut their prices when wholesale costs fall, which will prevent the kind of mark-up and overcharging that we all know is happening. This price freeze will happen and it will work.

Duncan Hames: Does the right hon. Lady agree that it would be in the interests of bill payers for all Governments to have an objective of keeping the cost of capital in the industry as low as possible so that bill payers may get their energy as cheaply as it can be produced?

Caroline Flint: I do agree. It is sad that in recent times so many people who want to invest in energy have said that the capital costs are going up because of the dithering and indecisiveness of this Government towards investment in energy.
	The third myth is that our proposals will deter investment. Nothing could be further from the truth. As EDF’s decision on Hinkley Point C shows, what matters for investors is long-term certainty on returns, not short-term gains based on overcharging. That is why we have supported the Energy Bill and given our backing to the framework of contracts for difference and the capacity market. And we will put right this Government’s failure to set a decarbonisation target, in order to give low-carbon investors the certainty they need to invest throughout this decade and the next.

Charles Hendry: Can the right hon. Lady name a single international investor who says that they are more likely to invest the billions of pounds we need in our energy infrastructure as a result of the policies that she is following? I know many who say they are less likely to invest, but can she name one who is more likely to?

Caroline Flint: What I hear from investors such as Siemens is their concern that the fact that the Government have not signed up to a decarbonisation target has affected their confidence in investing in our country. It is incredibly sad that the investment in renewable energy has halved in the past three to four years that this Government have been in charge.

Edward Davey: Can the right hon. Lady tell the House whether anyone has visited her or her right hon. Friend the Leader of the Opposition as an investor or a utility and said that because of the Government’s policies they are less likely to invest? Has anyone said that to her?

Caroline Flint: For the past month we have seen the Secretary of State and members of the Government standing up for the big six—[Hon. Members:“The big seven.”] —the big seven, rather than standing up for the consumers and businesses of this country, which are being ripped off. If we want a secure future in which investment can come forward, we need a little less bickering on the Government Benches about green levies and less fighting against what consumers want.

Andrew Gwynne: My right hon. Friend is right to debunk the myth about investment. Is she aware that under this Government we have dropped to seventh in the world in investment in clean energy technology?

Caroline Flint: Absolutely. Investment has halved from £7 billion to just over £3 billion. It is a shame that the consensus that we created in government has not been held together because of the fractious relationships on the Government Benches.

Several hon. Members: rose—

Caroline Flint: I will make some progress before I give way again.
	What the Secretary of State has to understand is that markets work only with consent. We know that there are some on the Government Benches who want to turn concern about rising energy bills into opposition against renewable energy. Unless we reform this market and restore trust, those same people will continue to undermine public support for the investment we need.

Caroline Lucas: I support the Opposition motion, as far as it goes, but does the right hon. Lady accept that without serious investment in energy efficiency, there will be no permanent end to fuel poverty? If so, can she explain why there is no mention of energy efficiency in her motion?

Caroline Flint: The hon. Lady is right. Energy efficiency is important, and I am sure that, like me, she is saddened by the attacks on those parts of the Bill that support energy efficiency measures for the most vulnerable and poor households in our country. It is interesting to see how the big six—[Hon. Members: “Seven.”]—the big seven have gone to Government saying, “Relieve us of this burden,” but they take out full-page adverts in national papers talking about how they have helped millions of people with their energy efficiency. They cannot have their cake and eat it. Labour will produce a Green Paper in 2014 with more detailed proposals on energy efficiency to make sure that we deal with both parts of the problem—market reform, prices and investment in renewable and clean energy, as well as how we help people keep bills down through energy efficiency.

Toby Perkins: If there was any doubt about the extent to which the Government have got it wrong, the fact that they think an energy policy needs the approval of the big six before being credible tells us everything we need to know. Will my right hon. Friend confirm which of the energy companies are making the biggest profits, and are they therefore the biggest investors in future infrastructure?

Caroline Flint: Centrica, which owns British Gas, has passed on the largest share of profits to its shareholders but made the least amount of investment, but all the companies are making good profits.
	What we have not seen is a market that encourages competition to the extent that the energy companies strive to compete with each other on price and to win the support of their customers. That is also what the motion is about, because the fourth myth is that our proposals will somehow undermine competition, but our market reform proposals would increase competition. They would level the playing field and enable independent generators and small suppliers to compete more effectively. Of course, no energy company, big or small, wants us to do something that reduces its profits, but suppliers such as the Co-op recognise that in order to restore trust the people need to see a clean break with the past. Smaller suppliers such as Ecotricity and Ovo, which might not necessarily like our price freeze, nevertheless say that it does not threaten their viability.
	The fifth myth is that the problems we see in our energy market today can somehow all be laid at the door of the previous Administration, a Labour Administration who—the House might recall—introduced winter fuel payments, which the current Secretary of State described at the times as a gimmick, insulated over 2 million homes through Warm Front and lifted over 1.5 million people out of fuel poverty. Before Labour came to power, consumers could not even switch electricity supplier. As he knows, the restriction on suppliers also being generators was removed in 1993, under the previous Conservative Government, which led to the vertical integration we have seen over the past two decades. If the Secretary of State wants to compare records, I am happy to have that debate, but I think that the public would be better served if we all engaged in a proper debate on how to reform the market for the future.
	The Secretary of State might not agree with our proposals, and that is his choice. He will have to account to the 47,550 bill payers in his constituency if he opposes our price freeze in the Lobby this evening. I believe that the public deserve a proper debate. The motion presents the House with clear proposals to restore people’s faith in the energy market and get them a fairer deal.

Steve Brine: The right hon. Lady is being generous in giving way. She mentioned smaller suppliers. She will be aware of Utilita, one of the good small energy companies, which is based in my constituency. I wonder whether she is aware of the comments of its managing director, Bill Bullen, who wrote in The Times shortly after the Leader of the Opposition’s conference speech that with any price freeze
	“the impact on smaller energy suppliers will be much harder felt and the level of competition in the market will drop.”
	Is that now an Opposition policy intention?

Caroline Flint: Small suppliers have told us on the record that the most important thing for their future viability and competition is openness, transparency and access, and that is what our proposals seek to do.
	Let me deal with each of our proposals in turn. The first is to freeze gas and electricity prices for 20 months. We would do that—the Government could do this now—by legislating to give the Secretary of State the power to modify suppliers’ licences to stop them raising their prices. Over 20 months it would save the average household £120, the average small business £5,500 and the average medium-sized firm nearly £33,000.

Neil Carmichael: rose—

Caroline Flint: I am not going to give way.
	The reason that is needed is simple: the public have been overcharged. Figures we published yesterday revealed a large and growing gap between the costs that energy companies have paid on the wholesale market and the prices they have charged their customers. They confirm what the chief executive of Ovo said the week before last when he noted that wholesale prices had been broadly flat over the last two years and that companies could be facing higher wholesale costs only if they had bought energy from themselves and above the market price.
	Those figures, which have been audited by the House of Commons Library, also confirm that the mark-up cannot be explained by any of the other excuses we keep hearing from the companies when they raise prices, be they network charges or policy costs, because more than half the increase in bills has gone straight to the energy companies, either in the form of higher profits or to pay for inefficiencies in their businesses.

Andrew Gwynne: My right hon. Friend will also be aware of the information Ofgem published this week showing that wholesale prices have increased by just 1.7%, while the average bill has increased by more than 9%. Is not that why Labour is absolutely right to call for a price freeze?

Caroline Flint: My hon. Friend is absolutely right. There is a growing chorus of voices saying that something is wrong in the market and in what we are being told about rising costs leading companies to increase bills. It just does not add up. Research by the Institute for Public Policy Research has shown that efficiency savings alone could knock £70 off the average bill. To correct the overcharging that has happened in the past and give consumers some badly needed respite for the future, we propose to freeze prices for 20 months.

Ian Lucas: Is not there a good precedent for acting when there is a defect in the market? Did not the Conservative Government in 1981 impose a windfall tax on the banks when the market did not work and the banks themselves made a windfall?

Caroline Flint: My hon. Friend is right. I think that the former Prime Minister, Margaret Thatcher, also imposed a windfall tax on oil and gas. The truth is that when the market is not working it is important for Governments to step in, because failing markets do not provide competition or the security that people want
	from the energy sector. We all agree that these things, whether energy or water, are essential to life and that we all need them. In that situation, people expect Governments to step in and ensure that the market is fit for purpose.

Nicholas Dakin: Is not it interesting that the previous Conservative who won a general election, Sir John Major, recognises the need to do something, which is why he has urged a windfall tax on this occasion?

Caroline Flint: In his wide-ranging speech, the former Prime Minister expressed his concern about Governments being out of touch with the public, whether on energy or the cost of living. He suggested a windfall tax, but we want something that goes straight to consumers, which is why we think the price freeze is the right way ahead.

Several hon. Members: rose—

Caroline Flint: I will make some progress, because I am conscious of the time.
	Vital though the price freeze is, it is not the only part of the package before the House today. There is widespread agreement that Britain’s energy market is neither as competitive nor as transparent as it should be. There are two connected reasons for that. The first is the vertically integrated structure of the big six energy companies. The principle underpinning privatisation was that supply companies would compete with each other to drive down generation costs and keep prices efficient, but today all the big six energy companies both generate and retail power. Collectively they supply over 98% of the retail market and account for 70% of electricity generation. The problem is that if suppliers are also generators, what incentive is there to keep wholesale costs down if the effect is to reduce the profits of the company as a whole? While energy companies often claim that their profit margins are only 5%, they omit to mention that their profits on generating electricity are, on average, closer to 20%.
	The second connected problem is that if the big six can supply most of their customer base from their own power stations, there is little incentive to trade on the open market. It is not possible to determine what physical volumes of gas and electricity are traded within vertically integrated companies as that information is never disclosed, and the prices they charge themselves are never published, but according to the London Energy Brokers Association just 6% of energy is traded on the open market. That makes it difficult for independent generators to secure long-term deals to sell their output, which in turn inhibits future investment. At the same time, independent suppliers are prevented from expanding and new suppliers are deterred from entering the market because they find it difficult to access forward contracts that provide the volume and shape to meet their customers’ needs.
	That is why the motion proposes two fundamental changes to the way in which the market works at the moment. First, it would force the big six energy companies to ring-fence their generation businesses from their supply businesses. This would counter the natural conflict of interest within vertically integrated companies and ensure that the interests of supply businesses are better aligned with those of their customers in enabling them to seek out the best possible prices. It would also prevent self-supply, which, in turn, should increase the
	volume of energy being traded openly and create a more competitive and transparent market. If the Secretary of State disagrees, will he explain how the public interest is served by allowing energy companies to generate energy and supply it to themselves at a price that is never disclosed, and in a way that makes it almost impossible for other players to get a foothold in the market? How does that help consumers, how does it help competition, and how does it increase transparency? If he does not disagree, why will he not back our proposal, or what is his alternative?

Edward Davey: I am listening very closely to the right hon. Lady, because she is, I think, putting before the House a new proposal on ring-fencing. For the sake of clarity, is that about splitting up the big six companies into new companies—a total break-up—or an accounting separation and self-supply restriction? Which is it? We need to know.

Caroline Flint: I have to say to the Secretary of State that I am very disappointed with that intervention. [Interruption.]

Mr Speaker: Order. Let the right hon. Lady be heard.

Caroline Flint: Beyond the customary theatrics that sometimes dominate debate in this House, for which we should all admit our responsibility from time to time, I would say that if one looks back over Hansard it is clear that for the past two years, whether at DECC questions, in Opposition day debates or in urgent questions, I have been putting forward measures to reform this market, including a break-up of the way in which the companies run their generation and retail sides. We have said in this House—I will obviously send this information to the Secretary of State—that we need to create, as we did with the networks, a separation in relation to the way in which the companies run things. That does not necessarily mean having two companies, but it does mean having two different legal entities. The Secretary of State is, in effect, saying, “Oh, it’s all right—it’s fine.” We have made this proposal time and again, and it has been reported in the press time and again. It is unfortunate that he lets himself down with that sort of intervention.

Albert Owen: The Secretary of State should read the transcript of last week’s DECC Committee meeting with the big six, at which the chief executive officer of E.ON, the only one who bothered to turn up, said that he had no problem with separating retail from generation.

Caroline Flint: We will be publishing a green paper that will expand further on our energy market reforms. Of course we welcome a discussion with the big six and others about how we take this forward, but we are very clear that we have to stop the cosy relationship between the generation and retail sides. It cannot be allowed to go on in the way it has.

Seema Malhotra: Does my right hon. Friend agree that it is important to restate that this whole debate is about consumers? This is about the British public—ordinary families and businesses who need the best deal—and not about having a petty debate about whether a company has one legal entity or two legal entities.

Caroline Flint: It is about recognising the problem and trying to find a solution. That is exactly what Labour has been doing and talking about, as is on the record in this House, for the past two years. The Government are not listening to consumers or to those who want to get access to the market because they are standing up for the big six.

Edward Davey: rose—

Caroline Flint: I will give way to the Secretary of State again, although he will obviously have a right of reply.

Edward Davey: The right hon. Lady is telling us about these policies that she has. In forming them, did she read Ofgem’s final proposals on wholesale power market liquidity, which were published in June?

Caroline Flint: We have looked at, and debated in this House, the way in which Ofgem has been working in the past few years. We looked at the way in which it was working under the Labour Government when it did not use the powers we gave it. It is not fit for purpose and it needs a massive change. The sadness about Ofgem is that when it has produced reports on, for example, whether bills are going up when wholesale prices are not, it has done very little about the situation.

Several hon. Members: rose—

Caroline Flint: I will take one more intervention and then make some progress.

Luciana Berger: I thank my right hon. Friend for kindly giving way; she is being very generous with her time. I imagine that she, like me, has gone to visit energy companies and has seen for herself that one, not far away from this building, has its generation department physically next door to all its displays and where it buys energy. Does she believe that that is the issue we now need to address, as stated in the motion?

Caroline Flint: My hon. Friend is right; she is talking about the trading floor in Victoria. It is interesting how closely the different parts of these organisations work together. In fact, some companies have welcomed the move to separate the generation and supply side, but we are not interested in a piecemeal approach with six different versions of what it should involve. That is why we need law that is consistent, transparent, and does the job.
	At the moment, poor liquidity is recognised as the single biggest obstacle to improving competition in the energy market. If all electricity had to be traded via an open exchange, or a pool, that would create a level playing field that would enable any market participant to compete on price in order to retail power to the public. This would be different from the previous pool in two important respects. First, under the previous pool there were only two generators, who were therefore able to exert considerable influence on the market price and, indeed, to ratchet it up over time. Today, there are many more generators. Secondly, when the old pool was originally established in 1990, only generators were able to place bids, which again gave them excessive market
	power. Today, there is no reason why a two-way pool, with generators and suppliers both placing bids, could not be introduced. Indeed, if the Government look around the world, at the Nord pool in Scandinavia or the power exchanges in the United States, they will see plenty of examples of markets with more exchange-based trading of this kind that are more liquid, more transparent, and encourage greater competition.
	Of course, we should do this in the most cost-effective way. Given the volumes that are already being traded on the day-ahead exchange, we would be open to creating a pool by requiring all generators and suppliers to trade 100% of their output on the N2EX exchange. If the Secretary of State does not agree, will he explain why he thinks that allowing these firms to do most of their trading in secret, behind closed doors, serves the public interest?

Michael Weir: I am listening very closely to the right hon. Lady, and I even agree with some of it, but I am genuinely confused about the idea of a pool and how it fits in with the Energy Bill’s contracts for difference, which guarantees a strike price for generators. I fail to see how putting all the energy into a pool will create competition, as the price has already been set, and if it goes above that, the company will have to pay back the difference, while if it goes below it, the taxpayer will have to pay.

Caroline Flint: That might be the price for the generator but it is not the retail price, and that is what is important in terms of competition and keeping pressure on. I am surprised that Scottish National party Members decided not to support the price freeze. They are on the side of the Prime Minister and the big six while my colleague Johann Lamont—Scotland’s Labour leader—and Scotland’s millions of energy consumers support the price freeze.

Khalid Mahmood: Does my right hon. Friend agree that while this Government bicker about the structure of the energy companies, my elderly and infirm constituents will be perhaps be dying this winter because of the energy price hikes under that lot over there?

Caroline Flint: What is happening to people now is very concerning. All the consumer organisations and those from the fuel poverty lobby are extremely worried about the choices that people are making between heating and eating. The idea of putting on another jumper is an insult to those people, many of whom are older and more vulnerable residents who are not online and are in the group that does not switch. Switching is not going to happen as a result of entreaties from the Government, and we need more action on that.

Several hon. Members: rose—

Caroline Flint: I will make some progress, because I want to get on to one of our other policies that could have an effect this winter.
	A competitive, transparent energy market is our aim, but markets must have rules. The question is what those rules allow and what they encourage. Do they mend
	broken markets or do they allow some firms to take advantage at the expense of everybody else? The motion proposes two important changes to the rules.
	First, we all think that there should be simpler and fewer tariffs, but we must also ensure that the market protects those who are less able to switch. The over-75s are the most likely to live in homes with poor energy efficiency and the most vulnerable to cold weather, but they are the least likely to switch supplier and the least able to access the cheapest deals, which are often online. As a result, they often pay more than they need to. The motion proposes that we make the energy companies put all over-75s on the cheapest tariff. The energy companies have told me that they can do that.
	Secondly, the constant attacks on clean energy are short-sighted because investing in clean, home-grown energy and energy efficiency will improve our energy security, make us less reliant on imports and leave us less vulnerable to price shocks in world markets.

Duncan Hames: Will the right hon. Lady give way?

Caroline Flint: No, I will not give way.
	We currently have the problem that when wholesale costs increase, bills go up like a rocket, but when wholesale costs fall, bills fall like a feather, if at all. In a properly competitive market, cost reductions would be passed on as quickly and as fully as cost increases. I urge the House to support the proposal in the motion to establish a new regulator with the power to force companies to cut prices when wholesale costs fall. I know that the president of the Liberal Democrats supports that proposal, because he said so to the audience and viewers of “Question Time” when I sat next to him on the panel a few weeks ago. I hope that the Secretary of State will confirm his party’s support for the proposal in his speech.
	That is what real action looks like. That is what a Government who put the interests of ordinary people ahead of the energy companies would look like. What a contrast it is with this Government: a Government who pretend to put everyone on the cheapest tariff, even though 90% of people will see no benefit, but who refuse to put all over-75s on the lowest deal; a Government whose only answer is to tell people to shop around, even though switching levels have fallen to an all-time low, as people have lost faith with the market; and a Government who want to roll back the very measures that will insure us against rising prices in the future because they are too weak to stand up to the energy companies today.
	Let us remember that 60% of the levies that the Government are rushing to blame were introduced by them. It was the Chancellor of the Exchequer who introduced the carbon floor price, which leaves British consumers and industry paying over and above what is paid by our European neighbours for energy. They talk about value for money, but it is they who designed the energy company obligation—a scheme that requires 53 pieces of information to be submitted for one measure to be installed. When they talk about moving policy costs from people’s bills to people’s taxes, let us remember that it was this Government who abolished Warm Front and now have the unenviable record of being the first Administration since the 1970s not to have a publicly funded energy efficiency scheme.
	Today’s motion might refer only to energy prices, but it is about much more than that. It is about who our country is run for. Is it a country that works for hard-working people or are we settling for a country where only a few at the top do well and everyone else struggles? The Opposition know that the first and last test of economic policy is whether living standards are rising for ordinary people. Today, the House faces a choice: a choice between whether it is people’s bills that will be frozen this winter or their homes; a choice between whether we reform broken markets or defend them; a choice between whether we stand up for the 60 million people who live in this country or the big six energy companies, for the 2.4 million businesses or the big six energy companies. The reality is that if we do not fix this broken market, nobody else is going to. Today, in this House, we have it within our power to provide real help now to millions of people who are facing the cost of living crisis and to reform the energy market to deliver fairer prices in the future. I commend the motion to the House.

Mr Speaker: Before I call the Secretary of State to reply for the Government, I remind the House that in consequence of the large number of Members who wish to speak, I have imposed an eight-minute limit on Back-Bench contributions.

Edward Davey: I have notified you, Mr Speaker, and the right hon. Member for Don Valley (Caroline Flint) that I will not be here for the final part of the debate. I apologise for that. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) will be summing up.
	I want to make it clear at the start of my speech that the Government worry about rising electricity and gas bills all the time. As part of our economic strategy, we are working to bring down prices, get people into jobs and get the economy going. I will touch on that general point shortly.
	I welcome this debate and hope that there will be many more debates like it, because we want to debate which party and which side of the House has the best policies to help people and to improve Britain’s energy market.
	I regret the fact that we have lost the consensus on energy and climate change policy that we had until very recently, because consensus is vital. We need tens of billions of pounds of investment in new energy generation and networks. If we are to persuade investors, not just in the UK but around the world, to invest in the UK, they need to see that there is consensus on these issues. I hope that we will get back to that. I thought that we had got back to it when there were just eight votes against the Third Reading of the Energy Bill. All the major parties, including the nationalist parties, voted in favour of the Bill. All the Labour Front Benchers voted in favour of the Bill. I welcomed that at the time. I just wish that the consensus had not broken down so quickly.

Caroline Flint: Will the Secretary of State acknowledge that in supporting the Energy Bill, we made it quite clear that it did not contain measures to tackle the problems in the broken market or the concerns of
	consumers? We made it clear that we reserved the right to continue to campaign for the measures that we have outlined today, which would fix the market and put consumers at the top of our concerns.

Edward Davey: We rejected the right hon. Lady’s arguments at that time and we reject them again today, as I shall set out. However, I am serious when I say that it is critical that we show investors around the world that there is consensus on these issues. I will try to rebuild that consensus in this debate and time and again afterwards, because I believe that that is in the national interest.

Charles Hendry: I completely agree with my right hon. Friend on the need for consensus. Does he agree that one of the outcomes of the consensus that there had been until recently was very low political risk when investing in the energy infrastructure of this country? As a direct result of what the Labour party has done, there is now political risk in this country, which pushes up the cost of borrowing and pushes up bills.

Edward Davey: My hon. Friend is right. What the Labour party has done has increased the cost of capital. Who loses as a result? The consumer. By recklessly proposing this irresponsible policy, the Labour party has shown that it is against the consumer.

David Mowat: The Secretary of State has made a valid point about the consensus on the Energy Bill. Is he aware that the Labour party amended the Energy Bill yesterday in a way that will ensure that coal stations are switched off more quickly, at an estimated average cost per consumer of £50? The Labour party then comes to this House and proposes this motion. What does he think about that?

Edward Davey: We are listening to their lordships House. I have to tell my hon. Friend that the argument is a little more complicated than what he has set out.
	Consensus is critical, not just across the House, but within the coalition parties. I accept that there have been debates within the coalition, but we have come together and produced a coherent energy policy. I will aim to rebuild the consensus with the right hon. Member for Don Valley because, as I think she knows, that is in the national interest.

Ian Murray: I am grateful to the right hon. Gentleman for giving way so early in his contribution. He talks about sending a message of consensus from this House to investors in the energy market in this country, but today he has the opportunity to send a message of consensus from this House to people who are struggling to heat their homes this winter. Will he take that opportunity?

Edward Davey: I certainly will because I believe we have the best policies. There are two routes to rebuilding that crucial consensus. The first, which I would love to take, is to invite the right hon. Lady and the leader of the Labour party to discuss the issues with me so that we can try to reach out to Labour Members, explain why we think their policies are extremely damaging, and try to get the energy policy back on to that important political consensus. I fear, however, that that will not be possible. The noises we have heard from the Leader of
	the Opposition and the right hon. Lady suggest that they do not see the error of their ways, despite many people explaining it to them.

Caroline Lucas: rose—

Edward Davey: I will give way to the hon. Lady but I then must make some progress.

Caroline Lucas: Will the Secretary of State accept that the green deal is not working, that zero-carbon homes are off the agenda and renewable energy is under attack, and that a late amendment to the Energy Bill in the other place shows that the Government are trying to scrap their legal duty to end fuel poverty altogether? Is he really surprised that the public do not believe his Government’s crocodile tears over rising energy bills when the Government’s own policies are making that worse?

Edward Davey: I completely reject everything the hon. Lady said. First, £31 billion has been invested in clean energy since 2010, and according to Ernst and Young we are now the fourth best place to invest in renewable energy—that is up, despite what the right hon. Member for Don Valley often says. More than 85,000 assessments have been made under the green deal, and more than 81% of those who have had green deal assessments have either had work done, are getting it done, or are considering having it done. That is much more of a success. The hon. Member for Brighton, Pavilion (Caroline Lucas) does her case no good by talking down the green deal.

Several hon. Members: rose—

Edward Davey: I will not give way as I want to make some progress. I have made it clear that I would like the Opposition to come and talk to us so that we can rebuild that national consensus, but I fear that that is not going to happen. Instead, we will have to expose Labour’s so-called policies for the fraud they are. I am going to do that in full today and, I hope, in future debates. I hope that when Labour Members hear the arguments against the policies of those on their Front Bench, they will reflect and realise how irresponsible and ineffective those policies are.

Several hon. Members: rose—

Edward Davey: I want to make some progress. I also want to talk about the context for this debate, which is the cost of living. When considering the cost of living, one tends to think about inflation and how the general price basket is affecting people, particularly the poorest in our land. We should be focused on getting inflation down robustly.
	When we came to government, inflation was 3.4% and rising. We had to bring it down, and latest figures show that this month inflation is now lower at 2.7%, and forecast to stay low. That is an achievement. In the context of the cost of living we have seen employment and growth go up, and unemployment, the deficit and inflation go down. That economic record will help people up and down the country because we are seeing the benefits of that. To give an example to the Labour party, in the past year alone, disposable incomes have grown.

Luciana Berger: Will the right hon. Gentleman give way?

Edward Davey: I will not give way. Disposal incomes are now higher than in any year from 1997 to 2010. That is because of our income tax cuts for people on low and middle incomes, because we have taken action on fuel duty and frozen council tax—[Interruption.]

Dawn Primarolo: Order. The Secretary of State has indicated that he is not going to give way, which means that Members should not shout across the Chamber. It is becoming impossible to hear what the Secretary of State is saying.

Edward Davey: I was making the case that we have taken action to help people with the cost of living. Look at what has happened to gas and electricity prices. Under Labour gas bills doubled. In the previous Parliament, the average annual rise in gas prices was 12% per annum; in this Parliament it has been 10% per annum—far too high, but less than under the Labour Government. We could say the same about electricity prices. In the previous Parliament the average annual rise in electricity prices was 8% per annum; it is now 7% per annum—too high, but a better record than under Labour. According to recent Office for National Statistics figures for household spending on electricity and gas bills there was a 9% per annum rise in the previous Parliament; that is down to 6% in this Parliament. We want to do better, but we will not follow the record of the Labour party, which was dismal on prices and bills.

Steven Baker: Has the Secretary of State made an assessment of how much of the recent price rises are the result of the Labour party announcing its policies and causing people to look forward?

Edward Davey: I have not made that analysis, but I know that others have and are concerned that Labour’s policy will put up energy prices in many different ways.
	I promised to analyse Labour’s policy and contrast it with the Government’s, and I will do that now. Let us start with Labour’s price freeze. The right hon. Member for Don Valley tried to say that the Government have put myths about. She tried to debunk those myths, but failed completely. We have made it clear that we believe that Labour’s policy is a complete con because prices could go up after the price freeze. The right hon. Lady’s answer to that is the amazing piece of legislation she is going to introduce, which will stop that. It will not, however, because the proposed legislation she described has no price regulation in it. If she is going to say that she will introduce full-scale price regulation, let her get to her feet now. If she is not, she simply cannot say that prices will not go up after her price freeze.

Harriett Baldwin: On that point, did not the Leader of the Opposition admit the day after the announcement of his policy that he could not guarantee that prices could be frozen if world energy prices rise?

Edward Davey: That is absolutely spot on. When he responded to that point, my right hon. Friend the Prime Minister made it clear that the Leader of the Opposition had sold the pass on their policy. If wholesale prices go up during the price freeze, they will not just hit consumers—we are worried that consumers will be fleeced by Labour’s policy—but they will also hit the competition and the small suppliers who are producing deals that people are already benefiting from.

Caroline Flint: Does the Secretary of State believe that the big six companies are overcharging their customers?

Edward Davey: I believe that competition is the way to sort that out, and I thought the right hon. Lady was saying that in her speech. I thought the point of her speech was to say that the markets are not working, and that in order to tackle overcharging she wants the markets to work. Is she saying that that is not her position and that she will bring in profit caps and stop companies overcharging, or is it competition? Competition or regulation—let the right hon. Lady come to the Dispatch Box and tell us. She cannot.

Duncan Hames: Will my right hon. Friend give way?

Edward Davey: I will make some progress and then I will let my hon. Friend in.
	Labour’s price freeze is a con. It damages competition and, as we have heard, it damages investment. That contrasts with what the Government are offering, which is direct help to the poorest in society, radical energy efficiency programmes, and a focus on competition that the Labour party never had. That direct help, the warm home discount—£135 off the bills of 2 million of the poorest people—was never offered by the Labour party. We are taking forward the winter fuel payment and we have tripled the cold weather payment. That is direct help to the poorest people, and we are proud of that.

Rehman Chishti: Will the Secretary of State give way?

Edward Davey: I will make some progress and then I will give way.
	On energy efficiency, the energy company obligation—which the hon. Member for Brighton, Pavilion said is not working—has already helped 216,000 households this year alone, and we expect many more people to benefit from that by the end of the year. I have explained how well the green deal is going with 85,000 assessments already made.
	When the Government talk about switching, the Labour party pooh-pooh it, saying, “That’s not the way to do it. Switching isn’t so important.” However, let us look at the facts on switching. uSwitch shows that, between 1 November 2012 and 31 April 2013, people who switched any supplier for both gas and electricity saved an average of £294, which is far more than they would save from the energy freeze offered by Labour.

Nigel Adams: Does the Secretary of State agree with my constituent, Nick Jones, who wrote to me on Friday—I have never met or spoken to him—about the Prime Minister’s advice on switching? He saved £611 a year on his gas and electricity costs. He was prompted to look at his phone costs and saved a further £230. He said:
	“I can only say a big thank you to the Prime Minister for his advice and giving me the confidence to take this step and make a saving of £841 per year to my family’s budget.”
	Is not switching a better approach than trying to fix the market, which is the mad-cap scheme proposed by the Opposition?

Edward Davey: My hon. Friend is absolutely spot on. As the uSwitch figures show, there are big savings to be made. Interestingly, the right hon. Member for Don
	Valley says that switching is not enough and talks down switching and the opportunity of millions of people in our country to make big savings. She should be ashamed.
	We are pushing switching very, very hard. The evidence is that switching is growing fast, as described by my hon. Friend the Member for Selby and Ainsty (Nigel Adams). Let me give the House one further piece of evidence. First Utility has increased its customer numbers by 57% from the beginning of October. People are switching in larger numbers. They are moving away from Labour’s big six to the coalition’s competition.

Caroline Flint: The amounts that people have saved in the Secretary of State’s examples suggest that they were being overcharged in the first place. Does he agree that getting the best tariff and encouraging switching does not mean that people will get a good deal? The market is rigged.

Edward Davey: I am coming to the rigged market, but the market was rigged by the Labour Government. It is Labour’s big six and Labour’s market. We are changing and reforming it while Labour does nothing.
	One thing that worries me about switching is that we need to ensure that it operates for the poorest in our country. The right hon. Lady and another hon. Member made the point that, sometimes, the fuel poor and many elderly people do not get the benefits of the market and are not helped by competition switching—the figures bear that out. We cannot just rely on switching; we need to ensure that it works for those people. That is why the Government have put so much money behind the Cheaper Energy Together scheme and collective switching, and why we are putting money behind the big energy saving network. We want to ensure that Age UK and the Citizens Advice Bureau go out into communities to offer advice to those people. That is how to ensure that the poorest in the land can get the best deals in our land.

Khalid Mahmood: Is the Secretary of State aware that the poorest people cannot switch if they are in debt to the company they are with?

Edward Davey: Yes, I am aware of that. That is why we have raised the amount. Under Labour, it was about £100 or £150. With Ofgem, we have raised it to £500 to enable people to switch. I am afraid the hon. Gentleman is behind the times.

Duncan Hames: For those of us who want more competition, is not the problem that the price freeze and the forward purchase of energy, which the right hon. Member for Don Valley (Caroline Flint) has described, is much more difficult for the smaller suppliers than for the bigger ones? The price freeze will do nothing to support a competitive market when it comes to an end.

Edward Davey: My hon. Friend is absolutely right. We have seen a big growth in independent suppliers and competition, which did not happen under Labour. Labour Members now want to kill it. Having created the big six, they want to help them. We will not allow that to happen.

Several hon. Members: rose—

Edward Davey: I will give way to my hon. Friend the Member for Ipswich (Ben Gummer) and then make progress. I apologise to other colleagues.

Ben Gummer: The Opposition missed something else in the debate. In my constituency, more than 400 jobs—[Interruption.] Will the right hon. Member for Don Valley (Caroline Flint) listen to my point? [Hon. Members: “Ooh!”] I find it surprising that we have to listen to childish noises from Opposition Members when we are debating such an important matter. More than 400 people in my constituency have jobs in independent energy companies that are challenging the big six. One of them challenges on business services, and the other provides consumers. Those 400 jobs will go the minute the market is controlled by the Labour party. Do Labour Members not care about those jobs?

Edward Davey: My hon. Friend makes an excellent point. Our policies will work. We know that because they are working. We are getting the supplies and switching.

Angus MacNeil: rose—

Toby Perkins: rose—

Edward Davey: I am going to make some progress. I have given way a lot and will not give way for a while yet.
	On Labour’s pool and ring-fencing proposals, the Government contrast the policies of the right hon. Lady with our policies for greater transparency in the financial accounts of the big six and for Ofgem’s wholesale market reform “Secure and Promote”. Interestingly, when I asked her whether she had read that document, she said that she had not—[Interruption.] To be fair, let me correct the record: she did not answer the question. If she has read it, she can come to the Dispatch Box and tell us. She is not coming to the Dispatch Box, so we know that she has not read the document. Let me help the right hon. Lady. It would have been beneficial for the Opposition to have read the documents. They claim that Ofgem is appalling and is not doing any work on competition, but the document shows that it has done so.
	Interestingly, the reason for the work is given at the beginning of the document. Ofgem produced the document because it wants to make more competitive markets to help the consumer. The right hon. Lady has not read the document, which is not very good. It is clear from her policies that she has not done so.

Rehman Chishti: Will the Secretary of State give way?

Edward Davey: No, I am not giving way.
	The right hon. Lady talked about the pool and the exchange on which the electricity will be traded, but she has not noticed that the day-ahead market in Great Britain has boomed under this Government. In 2011, just 5% of final Great Britain demand for power was traded on the day-ahead exchange. In the past six months, more than 50% was traded. We have seen a big increase, but she did not even bother to mention it.

Alan Whitehead: Will the Secretary of State give way?

Edward Davey: No, I am not giving way.
	Ofgem has looked at whether or not it should mandate 100%. It will ensure that there are new reporting requirements so it can check what is happening. It will say that, if the number does not improve and stays as it
	is, it will intervene. It is not intervening now—the right hon. Lady will not know this because she has not read the document—because the independent generators have not asked for it to do so. The independent generators say that the day-ahead market is not the problem for competition and that the day-ahead market is not the market in which there is room to drive down prices. They say that the problem is the forward markets—the month-ahead, six months-ahead, year-ahead and the two years-ahead markets.

Andrew Gwynne: Will the Secretary of State give way?

Edward Davey: No, I will not give way. I want to explain to the House why the document is so important, and why Ofgem’s policies, which the Government support—we have put reserve powers in the Energy Bill to push them through—are so important for competition and pushing prices down for consumers.
	Independent generators need to know who will buy their electricity. The right hon. Lady is right that the big six can sell it to themselves, but independent generators cannot do so—they must sell it to someone else. That is a big risk for the independent generators, and they need to be able to cover it. Primarily, they do so at the moment through purchase power agreements or through bilateral trades, which are used mainly when selling to businesses. However, they say that they cannot guarantee those, so they must spend more, and that their capital costs increase because of those risks.
	Independent generators face another risk. The question is not only whether they can sell energy, but whether they can buy it. If they have a contractual power purchase agreement and their generation capacity is not working for a particular month and they are unable to supply, they fail their contract. To be able to enter more contracts and expand their businesses, they therefore need to know that they can buy energy in the wholesale markets if their generating capacity is not working.
	It is therefore essential that we have a liquid market for four months, six months and 24 months ahead. Guess what? The previous Government did nothing to enable that competition in generating markets. Interestingly, the policies the Opposition have proposed today will also do nothing about the real problem. The description that the right hon. Lady gave of her policies proves that point. If she had read the document, she would have seen on page 8 the analysis by Ofgem—working on all the contributions from the independent suppliers and all the people in the industry—is that the problem she has identified is no longer a problem. It has marked that problem “green”. The problems that we have identified, which we and Ofgem are fixing, are all marked “red”. She really needs to do her homework. There is no point the official Opposition coming to this House with ill-thought-through policies that will not work. Our policies will work for the consumer, push competition into the market and get prices down.

Neil Carmichael: Does my right hon. Friend agree that it is slightly surprising that the Opposition know so little about the big six, when one of their number—a shadow Minister in the other place—was actually director of government affairs for SSE? How does that stack up?

Edward Davey: It is true that the Labour party created the big six: it is Labour’s big six.

Andrew Gwynne: In the Secretary of State’s wibbly-wobbly world, it sounds as though everything in the energy market is working perfectly well. Does he therefore agree with the chief executive of Centrica that a daily profit of £7.4 million is a modest return?

Edward Davey: Let me put it on the record that it is important that our energy companies make profits. I think we need reasonable profits for people to invest. I also know why it is important that companies make profits: the right hon. Lady agreed with me when I asked her, last time we debated this. I asked her whether energy companies should make profits and she agreed.

Several hon. Members: rose—

Edward Davey: Let me finish answering the hon. Member for Denton and Reddish (Andrew Gwynne). I am not satisfied with the energy markets that we inherited from the last Government. We want to make sure that competition is working. That is why we have already had the retail market review with Ofgem, which is now improving competition in the retail markets. It is why we have Ofgem’s latest proposals in “Secure and Promote”, which the Opposition have not read, to improve competition in the wholesale market. I am not satisfied with the markets at the moment, but our policies—with Ofgem’s help—are coming into place now.
	We have had to run to make sure we turn round the markets we inherited, but I can tell the hon. Gentleman how quickly our policies are now coming in. The retail market review comes into effect, in terms of people’s bills, next month. Ofgem is still consulting with the industry, but expects to give a final response to its consultation this year. Then its proposals for a market maker, which will ensure transparency so there are none of the secret deals that the right hon. Lady keeps on about, will start happening in the first half of next year. We are producing the competition proposals and they are coming into force. People have not seen the benefits of them yet—I accept that—because we have been trying to turn round the rigged market that we inherited. We are now turning it round and people will begin to see the benefits over the years ahead.

Alan Whitehead: The Secretary of State has been waving a document around. Can he turn to the page in that document that discusses netting off between companies in the long-term market? Can he turn to the page in that document that discusses the question of creating trades at time of closure by companies? If he cannot do so, will he accept that the document is not quite the panacea for all the transparency issues that he thinks it is? Will he go away and review the things that the document does not say as well as what it does say about the transparency of the market?

Chris Ruane: He knows his stuff!

Edward Davey: I agree that the hon. Member for Southampton, Test (Dr Whitehead) does know his stuff, unlike many of his colleagues.

Chris Ruane: Answer the question!

Edward Davey: I am going to answer the question. When the hon. Member for Southampton, Test reads this paper, he will know that it is in a series of papers and other papers deal with those issues. The relevant
	paragraph—it does not deal with netting off, but it deals with the impact of netting off—is on page 7. The right hon. Member for Don Valley should like this, because we have some agreement on the need to make sure there is competition in the wholesale markets. It states:
	“It could also encourage business models that reduce the need to trade in the wholesale market, such as vertical integration and long-term contracts. Poor liquidity therefore inhibits competition between incumbent players in the market.”
	In other words, we need these proposals so that there is more competition in the forward markets so that new entrants can come in and the prices that the incumbents charge are more transparent—something that the right hon. Lady says that she wants to see.

Toby Perkins: I have heard the Secretary of State in this mood before. The last time was when he was defending the pub companies. A few months after he left that job, his party agreed that we were right and that he had been wrong all along. He is a tremendous defender of the vested interest. Can he tell me why any of the thousands of people in Chesterfield who happily signed our petition because they are so concerned about the cost of fuel should have any confidence, listening to him, that because he is doing this job things will be any different in the future? People are struggling, and he just does not have the answers.

Edward Davey: The hon. Gentleman cannot have been listening to the debate. It is clear that it is the Government who are standing up to vested interests, because we are bringing in competition against Labour’s big six. The problem for the Opposition is that they created the big six: we are the ones putting pressure on the big six.

Rehman Chishti: The Secretary of State will have heard the shadow Secretary of State say earlier that Ofgem is not fit for purpose. But when the Leader of the Opposition was Secretary of State for Energy and Climate Change, he said that Ofgem was fit for purpose. Does that not clearly show that the Opposition have no consistency, no vision and no strategy on these matters?

Edward Davey: My hon. Friend has been incredibly helpful because he anticipates what I am about to say about the third part of Labour’s policy package. It would abolish Ofgem, which it created and which the Leader of the Opposition reformed. It will replace it with Ofgem 2—a tough, new regulator. It is such a charade we could hardly make it up. We have been reforming Ofgem. We have given it powers that the right hon. Lady’s party failed to do in government. For example, if an energy company is found to have maltreated a customer the fines will go to the customer, not to the Chancellor of the Exchequer. That is one example of the new powers.
	We have a new regime in the Energy Bill, with a strategy, policy and statement to make sure that Ofgem is doing the job that this House and the Government want, and we have now got new leadership at Ofgem. I look at the record—we are now tackling competition issues in the retail market and the wholesale market. It is true that under the last Government Ofgem was not as powerful or active as it should have been: we have reformed that.
	We have gone further than that by now proposing to consult on criminal sanctions for manipulation of the energy markets. We are increasing the robustness of the
	regime by having an annual competition test. We have shown that we are not complacent. Although we have taken major measures to improve competition in the markets that we inherited, we want to go further year after year, because we believe in competition even though the Opposition do not.

Caroline Flint: The Secretary of State suggests that the Government have given powers to Ofgem to ensure that any redress goes to customers, but can he explain why recently, when Scottish Power were found guilty of mistreating their customers, of the £8.5 million fine only £1 million was to be shared among the 335,000 customers who were estimated to be victims of the company’s bad practices, while the rest was to be put towards the warm home discount? That does not sound to me like it is going to the customers who were victims of the company’s bad practices.

Edward Davey: I am surprised by that point, because the powers are in the Energy Bill and will take effect when it gets Royal Assent.
	We need a big debate on energy and climate change, and I hope that we keep having the debate not just today, and not just in the House, but over the next year and across the country. There are difficult issues in the debate, such as the trilemma of making sure that we decarbonise, keep the lights on and do so in an affordable way. It is not only this country that has to face those challenges: they are being faced across the world and especially in other European countries that face the same rises in gas prices that we are struggling with.
	The solutions are not easy. They are often complicated. I have been grateful for the right hon. Lady’s support during the passage of the Energy Bill—it may be qualified support, but it was support—but on this issue we obviously have a different set of policies. We agree that there are problems—not enough competition and people are struggling with bills—and we have to produce a solution for them. What we have heard from the official Opposition is irresponsible, ill-thought-through populist nonsense that will not assist a proper debate. Any analysis of the policies that are being served up soon reveals major flaws. I invite my right hon. and hon. Friends to reject the motion, and I invite the Opposition to think again and to act, for once, in the national interest.

Anas Sarwar: The Secretary of State spoke for just over 35 minutes. Nothing he said will have given any comfort to my constituents, or to anyone suffering as a result of the energy crisis. Perhaps he should reflect on what he has said and come back with something that will mean a lot more to people struggling with their household bills at this difficult time.

Toby Perkins: My hon. Friend will be aware that thousands of people in Chesterfield have signed a petition in favour of the policy we are debating today. After today, rather than send them a long letter, I will send them the Secretary of State’s speech, so they can see exactly what the Liberal Democrats think of the struggles they are facing.

Anas Sarwar: Absolutely, although I imagine my hon. Friend’s constituents would fall asleep after five minutes rather than read the speech in its entirety.
	As winter bites and the nights become colder, many of our constituents are again worrying about the cost of heating their home. Wholesale energy costs have increased by only 1.7% this year, but the average bills that Glaswegian families have had to pay have rocketed by more than 10%. According to Fuel Poverty Evidence Review, more than 800,000 Scottish households—almost 35% of Scots—are fuel-poor, and spend 10% or more of their household income on energy.
	What my constituents know, what I know and what the entire country knows, with the apparent exception of both the Prime Minister and the First Minister of Scotland, is that the British energy market is broken. It is dominated by only six companies, which collectively supply 99% of British households and generate more than two thirds of the country’s electricity.

Angus MacNeil: According to figures from the House of Commons Library, last year UK electricity prices increased by 5.7% on average, while the EU average was a fall of 3.5%. In fact, the UK had the highest increase of all the G7 and EU countries, bar Japan. Last year, the UK had the third highest prices in this area. Eight years ago it was little better—the fifth highest in the EU. Why does the hon. Gentleman think that the UK consistently pays the highest energy prices in the developed world?

Anas Sarwar: The hon. Gentleman highlights the need to fix a broken market across the UK. The bizarre thing is that he wants to leave the UK, but stay in the UK energy market. That is against the interests of the people of Scotland. I will come on to the wider policy of the Scottish nationalists in a moment.
	Given that we have had price hikes of more than £300 since the last election, and at the same time more than £7 billion of profits have gone to the shareholders of the big energy companies, does that not highlight the case for breaking the monopoly of the big six companies?

Duncan Hames: Will the hon. Gentleman give way?

Anas Sarwar: I am sorry, but I have given way twice already.
	Last week, we saw the big six sit before the Select Committee on Energy and Climate Change and claim that prices in the past few years have been driven by wholesale costs, when it has already been demonstrated that that is not the case. That was confirmed by some of the smaller companies, one of which told the Committee:
	“I can’t explain any of these price rises… I have been somewhat confused by looking at the explanations for the price rises that we’ve seen in the past three or four weeks.”
	There have been billions of pounds’ worth of profit while pensioners in my constituency face the impossible choice of heating or eating this winter. What could be more indicative of a broken market than one that leaves our most vulnerable citizens unprotected at a time of greatest need, solely in the name of higher profits?
	The problem is not simply the behaviour of the energy giants. My constituents are literally paying the price of being trapped between an uncaring, out-of-touch Tory Government pursuing cuts and profit at any cost, and a distracted Scottish Government desperately trying to frame any and every problem as a reason for
	independence—two Governments more interested in electoral dividing lines and narrow ideology than in improving the lives of the Scottish people. They are choosing to stand up for the vested interests of the big six energy companies and boost their profits while Scottish families struggle to pay their bills. It is indeed a sad day when Governments become a cheerleader for the energy companies, instead of putting struggling people first.
	Scots are now faced with a crippling combination of rising living costs and frozen wages that have created a cost of living crisis that both Governments are failing to address. Disappointingly, however, Alex Salmond wishes only to talk about the powers he wants rather than getting on and using the powers he has to make a difference. There is now an interesting coalition in the context of the constitutional debate in Scotland. We have a coalition of the Scottish National party, the Tories, the Liberal Democrats and the big six energy companies all standing up for their own interests, not the interests of the people of Scotland. The Prime Minister’s policy was not announced first by him: the first person to announce the Prime Minister’s policy on energy prices was the Deputy First Minister of Scotland, Nicola Sturgeon, at the SNP conference. She said that the SNP wanted to take the cost off the energy bill and instead put it on the tax bill, meaning that people who are working hard will continue to have to pay the price while big energy companies will get away scot-free. Those are the wrong priorities, and they are damaging.
	What else have we heard from the nationalists? They want not just to let energy companies off meeting their responsibilities for renewables, but give them a massive tax cut. They want to cut corporation tax, which will mean that after independence they will have more, not less, profits. What is even more confusing is that they say—we have heard it already from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—that the UK energy market is broken and that is why we need independence. Their policy, however, is to say, “Let’s break away from the United Kingdom, but let’s share the UK energy market.” That is not in the best interests of Scotland. Scotland makes up 8% of the UK population, yet one third of spending on renewables is spent in Scotland, so the whole of the UK is contributing, through their energy bills, to supporting the renewables industry. Do we honestly think that one third of renewables spending will continue to be spent in Scotland after independence? I do not think so. Independence would break the historic pooling of resources across the UK for the benefit of all.

Angus MacNeil: Is the hon. Gentleman aware of the purchase of renewable energy in the Republic of Ireland?

Anas Sarwar: Absolutely. We have not heard about Ireland for a long time. I am happy to consider the example of Ireland to show why we are better off in the UK. Corporation tax in Ireland is half the UK rate, but unemployment is double that in the UK. That shows us how working in partnership with our friends and neighbours in England, Wales and Northern Ireland benefits bill payers not just in Scotland, but across the UK.
	I want to highlight a positive example in my constituency and my city of what a caring administration can do to help people who are struggling at this difficult time. The
	Labour-led council in Glasgow, which, despite facing more than £150 million in budget cuts from the Scottish Government, has again stepped up to protect Glasgow pensioners over the age of 80 by offering a £100 winter fuel payment to those struggling to meet the costs of energy this winter. That is a Labour council using its powers to protect the most vulnerable in our communities. It is not making excuses about why it cannot or will not act, and it is not looking to pass the buck or put the blame on to someone else. It is not pointing fingers, or using other people’s misery as a basis to promote a political agenda or independence. Instead, it is providing a lifeline to thousands and responding to the cost of living crisis affecting our constituents. I am proud that on the Labour Benches we are standing up for British consumers.
	Under a Labour Government, we will not just break up the big six energy companies’ monopoly, but ensure fairness in the system and cut bills. For the people in my constituency, 38,549 households will have their bills cut if a Labour Government are returned at the next general election. We will save a typical household £120 and an average business £1,800, at a time when household budgets are being squeezed. Labour will not stand by but take action, as Glasgow city council has done, to help hard-pressed Scottish and UK families. We will put people first, while others continue to put their ideologies and political obsessions before the interests of the people of Scotland and the UK. We will tackle the cost of living crisis that is denied by the UK Government and the Scottish Government, despite official figures from the House of Commons Library that confirm that working people are £1,500 a year worse off under those Governments. Prices have risen faster than wages in 39 of the past 40 months, on both the First Minister’s and the Prime Minister’s watch; and chief executives have enjoyed pay increases averaging 7%, while public sector workers have had to endure real-terms pay cuts and worsening conditions. Tackling energy prices is crucial to easing the burdens on family incomes, which are symptomatic of a problem that these Governments are simply unable or unwilling to address.
	As my right hon. Friend the Leader of the Opposition said yesterday, the Government have nothing to say about our plans for the living wage, the falling value of the minimum wage or zero-hours contracts. They are silent because they believe in a race to the bottom and they know these things create the low-wage, high-profit economy that they seek and fundamentally believe in. It is an economy where profits of £7 billion and tax cuts for the richest peacefully co-exist every single day with millions of people living in poverty. It is an economy that prioritises six large companies over the well-being of 60 million people.
	The Opposition want real action to help British families: a price freeze while our broken energy market is fixed; a regulator that can cut unjustified price rises; a ring fence between the generation and supply businesses of the energy companies to ensure proper transparency and to force energy companies to trade the energy they produce in the open market; and a new simple tariff structure that people can understand. People in this country deserve action to help them during the winter months, not the damaging ideology of this Tory Government.

Charles Hendry: I put on the record my entry in the Register of Members’ Financial Interests, including my presidency of National Energy Action, the country’s leading fuel poverty charity.
	Anybody listening to the speech from the right hon. Member for Don Valley (Caroline Flint) will have been oblivious to the fact that this country faces an energy crunch. There is no doubt that it is coming. We can debate whether it will be in the latter part of this decade or in the middle of it, but clearly we need an enormous amount of new investment if we are to deliver the energy security we need. I make no apology, therefore, for starting my speech by talking about energy security. We cannot have affordability without security of supply.

Brian H Donohoe: Does the hon. Gentleman agree that nuclear power is part of the equation and that the Scottish Executive have made a grave error of judgment in ruling it out as a source of energy in Scotland?

Charles Hendry: I will not get involved in the private discussion between the Labour party and the Scottish National party, which seems to be creeping into this debate, but it is a matter of regret that new nuclear power plant will not be built in Scotland as well as England.
	Without the necessary investment, we will see not the lights going out, as people sometimes say, but brown-outs, where major energy users are asked to come off line for a period, and a price spike, which will have very damaging consequences for businesses and consumers. We need huge investment, therefore, in a range of different sectors. As part of the solution, we need to reform the market to bring in more investment than we have seen for many years. The situation was bad under the last Labour Government, but it goes back much further. Although we recognise the need for others to enter the market, I am disturbed by part of this debate, because we cannot secure such investment without the big six. We need the big six alongside other players in the market, and were we to drive them away, it would be much more difficult to deliver the necessary security of supply.
	Market reform is part of the process, but until recently, so has been political consensus. When the right hon. Lady reflects on her speech today, I hope she will consider its impact in the boardrooms of Spain, Germany, France and elsewhere around the world. They will be saying, “Is this a party that welcomes our involvement and future investment in the UK?” I can assure her that she is introducing a degree of political risk, making it more difficult to secure the investment we need if we are to deliver the affordability we want.

David Morris: Is my hon. Friend aware that when the Leader of the Opposition announced the price freeze, £1 billion was wiped off the energy stock market overnight?

Charles Hendry: That did happen, but it is actually worse than that, because to deliver the £100 billion-plus we need invested in our low-carbon sector, the companies investing need to borrow money, and the greater the political risk, the higher the interest on that
	borrowing. If the cost of borrowing increases by even 1%, the result will be a dead-weight cost of £1 billion a year on consumers’ energy bills—just to pay for Labour’s political risk.

David Mowat: Will my hon. Friend give way, quickly?

Charles Hendry: I will not, because we are all on a strict time limit.
	Some of the projects that Labour says it cares about most will be hardest hit. Low-carbon projects are lumpier and require more investment upfront and so are most difficult to finance. I am talking about nuclear projects, renewables projects and in due course, I hope, carbon capture and storage. If companies looking to invest in those areas think that the terms under which they might invest could be changed retrospectively to their disadvantage, they will move away from the UK. We have to make this country more attractive to investment than elsewhere. If we do not, companies looking at international opportunities—

Albert Owen: Will the hon. Gentleman give way?

Charles Hendry: I will not. I know the hon. Gentleman’s enthusiasm for nuclear, and I want that nuclear power station built on Anglesey almost as much as he does. I care very strongly about that.
	If we are to get the necessary investment, we must make a compelling case for why companies should come here, rather than go somewhere else.
	We have heard reference to the decarbonisation target, but there is nothing in the motion about how that can be met. The measures in the motion would make it harder to get the investment we need to reach that target. Labour is going back to what it has done before, setting grandstanding, ambitious targets without putting in place the road map necessary to meet them. When we came into government, we had to put in place the renewables road map and the fuel poverty road map to address some of those challenges.
	The motion is not only counter-productive, but shows breathtaking ignorance of the factors that have driven up prices. We know that prices in this country over recent years have been driven up more by the wholesale price of gas, which is beyond—I believe—even the control of the right hon. Lady and Governments of any colour. The International Energy Agency says that we are moving into a golden age of gas, but it warns us not to assume that it will be cheap, as countries such as Japan and Germany move from nuclear to gas and growth in China and India means a greater demand for gas there as well. Those will remain the issues really determining prices.
	Labour’s policy is based on a deliberate falsehood about the causes of energy price increases and would be counter-productive, even if companies did not increase their prices to take account of it. It might play well with focus groups and work as a short-term political initiative, but it will do massive long-term damage to our ability to attract investment into the country, and in the process will do massive long-term damage to consumers, who will end up picking up the tab. That is especially unfortunate, because there are areas in the motion—for example, on transparency—where we could build on Ofgem’s work and deliver the common ground that many of us care passionately about.
	So what do we do? First, we need to have an honest debate about the factors driving up prices and to link that with an understanding of the long-term investment we need in this country and how we are going to secure it. As the Secretary of State said, we need once more to take politics out of energy policy, just as John Hutton and Malcolm Wicks did and as we tried to do in the early years of this Government. That is an important objective in its own right. We also need action now on the changes that Ofgem is proposing. These decisions should be taken by the regulator, not by politicians. One of the changes that we have made is to say that the Government should set the policy framework and that a robust regulator should then deal with how the market operates, rather than having politicians constantly wanting to be regulators as well as policy makers. We also need to focus on ease of switching, and we need to do more to ensure that people are on the best available tariff.
	Finally, I want to talk about what we in the Government can do to reduce the impact on bills. We could take some of the extra charges off the bills. In this regard, I have some sympathy with the amendment tabled by the Scottish nationalists. There are two elements of our energy bills that are highly regressive. The charges are borne by consumers including those on the lowest incomes, but the benefits often go to those on much higher incomes. They relate to energy efficiency and to feed-in tariffs for microgeneration, and I hope that the Government’s review of those policies will look at what could be done to fund those areas out of general taxation. They are good, important policies that we should support, but the way in which they are paid for at the moment means that people on the lowest incomes are paying a disproportionate amount towards their delivery. The Government have rightly decided to review that matter, and I hope that that will offer some early relief for consumers.
	This is an important debate. We need to get away from the simplistic measures proposed in the Opposition’s motion. We also need to take this opportunity to have a debate about this country’s long-term energy needs, and about how we are going to meet security of supply requirements in a low-carbon way and, above all, in a way that will keep energy affordable now and into the future.

Jimmy Hood: The Secretary of State apologised to the House at the beginning of his speech, saying that he would not be here for the summing-up speeches, and the House accepted that. I was rather disappointed, however, that he did not comply with the long-held convention of the House by staying in his place to hear the following speaker from the Opposition Benches. That was disappointing, to say the least, and I feel obliged to comment on it.
	I was once told that if someone stands by the side of a river and watches the logs go down, like the tide of mankind, they will see them float back again if they stand there long enough. I was reminded of that when I watched the energy company executives giving evidence to the Energy and Climate Change Committee last week. That exotic gathering of four had in its midst three representatives of the big six. Their evidence mimicked the three wise monkeys. They saw no evil in
	the hiking of energy prices, they did not hear the universal condemnation of their greed, and they spoke in glowing terms of their care and compassion while British consumers are suffering charges that have been fabricated by their rigging of the market.
	I served on the Standing Committee of the Bill that privatised the electricity industry. I recall that the Secretary of State at the time was Mrs Thatcher’s favourite boy, Cecil Parkinson. He was followed by John Wakeham. I note that there is a private Member’s Bill relating to the legacy of Mrs Thatcher. Well, the things we are discussing today are her legacy. I remember another former Conservative Prime Minister, Harold Macmillan—by then the Earl of Stockton—accusing the Thatcher Government of selling the family silver. That is exactly what they did when they sold off the electricity, gas, coal and water industries, and we are in deep water today because of that legacy.
	In my maiden speech, I recalled being a miner, and quoted Nye Bevan saying:
	“This island is made mainly of coal and surrounded by fish. Only an organising genius could produce a shortage of coal and fish at the same time.”
	The Tories, past and present, were and are such organising geniuses.

Ian Lavery: Is my hon. Friend and fellow former miner aware that it was announced on Tuesday that 48% of the UK’s energy is generated by coal?

Jimmy Hood: Yes. Indeed, half the world’s energy is produced by coal.
	We are an island people and, in my younger life when I was a miner, we were self-sufficient in energy. It is thanks to Government failures that we now have to go cap in hand to the Russians for gas, to the Chinese for coal—they are now buying up coal all over the world—and the French for nuclear-generated electricity.

David Mowat: Will the hon. Gentleman give way?

Jimmy Hood: I feel compelled to give way to the hon. Gentleman, because he has been trying to intervene on many Members, and nobody has allowed him in.

David Mowat: I thank the hon. Gentleman for giving way, although the Secretary of State did, in his generosity, let me have a go. The hon. Gentleman makes a good point about coal. Over 50% of this country’s capacity comes from coal. Was he as surprised as I was to see that Labour had tabled an amendment to the Energy Bill yesterday whose effect would be to close down the existing coal stations more quickly than is already planned. Does that not seem odd?

Jimmy Hood: I have been in this House a while now, and I have seen policies from both sides. There is too keen an opinion about being anti-coal. I know that the hon. Member for Brighton, Pavilion (Caroline Lucas) and the green movement, and some coalition Members, are anti-coal, but it is a fact of life that our energy would be a lot cheaper today if we had not closed down the Scottish mining industry. I attended an Adjournment debate today called by my hon. Friend the Member for Mansfield (Sir Alan Meale), in which he described how the few miners there are left had been deprived of their concessionary fuel. He talked about
	how pensioners, widows and disabled miners had lost out on their pension rights. This is all because there is no mining industry to support our people in retirement. That is quite shameful.
	Since 2011, the cost of energy has risen at an average rate of 1.6% a year, but the big six have increased prices by an average of 10.4% a year. I have listened to those who defend that situation, including the Secretary of State, who was so illiberal that it was untrue. He was more Osborne-ite than Lib Dem. I also listened to the hon. Member for Wealden (Charles Hendry). They seem to justify not freezing energy prices and not correcting the rigged market because to do so would interfere with investment. If those who are taking us for a ride by rigging the markets are saying, “If you stop me rigging the market, I will not invest”, my response would be that Governments have to govern. We cannot be held hostage by those monopolies. The situation in Scotland in recent weeks, in which the Government were being held to ransom, should worry us all.
	The truth is that my constituents are hurting, as are yours, Madam Deputy Speaker, and we need a Government who are on their side, not one who make excuses, support the bosses and the privileged few, reward the wealthy and punish the poor. That is not what this Parliament should be doing.
	I am getting nostalgic as I recall another one of my favourite quotes—that it is “the duty of government to seek to improve the quality and standard of life of its poorest citizen. Any Government that doesn’t do that is immoral”. We need to revisit that quote. Everything we do in this place should be driven not by the need to punish the poor for their poverty, but by the need to help them and lift them out of their poverty. When Governments and Parliaments fail at doing that, it has to be examined.

Rehman Chishti: The hon. Gentleman provided a quote on how not helping the poor is immoral, and I agree with him; of course that is right. If, however, we look at what happened to fuel poverty under the previous Government, we find that it went up by 50% in the last five years of that Administration—from 2.5 million to 4.7 million people. Does the hon. Gentleman agree with me, therefore, that the conduct of the previous Government was immoral?

Jimmy Hood: I could give the hon. Gentleman the obvious answer, but I will give him the polite answer. I do not welcome comments like that from Government Members when they are three years into their own government but always want to talk about the previous Government, especially when prices have been rigged, increases have been imposed on working people and the poor have been punished. All I hear is a young ambitious Conservative Back Bencher who wants to get on to the Front Bench by talking about what happened years or generations ago. I invite the hon. Gentleman and his hon. and right hon. Friends to consider what I said earlier: it is his duty, my duty and our duty to seek to improve the quality of life of our poorest citizens. We are not doing that. When the Labour leader talks about freezing prices and sorting out this rigged market, it might not be a panacea, but it is a good start.

David Mowat: We all agree that there is a real problem here and that the real problem is energy bills and fuel poverty, not just for consumers, but for industry, too. We hear about energy-intensive industries closing all the time.
	It is refreshing that we are here talking about reducing energy prices. In a lot of energy debates, I usually go through the Division Lobbies trying to stop the Opposition from increasing energy prices. We have divided, for example, on the decarbonisation target and on a perfectly respectable and reasonable proposal from the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) to reduce the solar tariff from six times grid parity to four times grid parity. As I mentioned earlier, Labour tabled an amendment in the House of Lords last night that will increase bills. Let us agree, however, that we are on the same side, at least in terms of our objective—we want to decrease bills.
	Before I explore that further, let me highlight an inconvenient truth that is at the heart of this debate. That inconvenient truth is comparability with other countries in the EU. I heard the shadow Secretary of State make two observations about other EU countries. I think she said that Spain already had a cap. That is true; she is right. Spain’s energy prices, however—for gas and electricity—are higher than ours. I do not think there is much point in having a cap if energy prices are higher than ours. The right hon. Lady also mentioned Scandinavia and its pool as a model for her pool. Again, if she looks at the gas and electricity prices in Denmark and Sweden, she will see that they are the highest in the EU—considerably higher than ours. We need to be careful, therefore, to look at these things in the round. [Interruption.] The shadow Secretary of State intervenes from a sedentary position; if she wants to intervene, I will be far more generous than she was.

Tom Clarke: The hon. Gentleman mentioned comparative prices and specifically mentioned Denmark. Is not one of the problems the fact that consumers here in Britain have to pay higher prices because much of the responsibility for conservation is being placed on those who purchase power—consumers—rather than on others whose main concern seems to be to deliver to their shareholders?

David Mowat: I am going to talk about progressive versus regressive ways of paying. Let me make the point again that among the 27 countries in the EU, our gas prices are the 26th highest. If a cartel is being operated, it is not a very good cartel. That is not to say that consumers are not in real difficulty now. One of the big issues, and one of the distinctive features of our energy market, is not so much the unit price as the fact that our housing stock is spectacularly poor in terms of energy insulation.

Brian H Donohoe: The hon. Gentleman is right to say that the prices are lower, but can he explain why in the last few years the increase has been larger than in any other European country?

David Mowat: No, I cannot, because I am not an expert on the market. I am merely trying to establish whether the absolute prices that we are paying vis-à-vis
	our European competitors indicate the existence of a cartel, as has been claimed on many occasions. That does not appear to me to be the case, but someone can always intervene on me—actually, they cannot, because that would be the third intervention and I would not be given extra time, but someone could always discuss the point with me in future.
	The fact remains that we have the 26th highest gas prices out of 27 in Europe and we need to be clear about what problem we are trying to solve. The problem that we should be trying to solve is the problem of our housing stock, whose standards need to be raised to the level of the standards in the rest of Europe. Germany’s gas prices are 40% higher than ours, but its gas bills are lower than ours. Why? Because its housing is better insulated and better built.
	I have five points to make. My first point is that whatever we decide to do on the basis of the various reviews, we should not reverse the thrust of our policy on insulation. We should not give up on the energy company obligation, the green deal and smart meters. I do not agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) on many issues, but I do agree that far and away the most effective way of making progress on energy in general is to ensure that there is better conservation and more efficiency.
	Secondly, we need to make the market work better—

Alan Whitehead: Will the hon. Gentleman give way?

David Mowat: No, I will not, because I have already given way twice.
	I welcome the proposal for a competition review: it would clear the air. If there is indeed no cartel, surely everyone should welcome it. I also welcome the proposal for 24-hour switching, although, having reflected on why I might not switch as often as I should, I concluded that it was still too difficult. I have just moved house, and it took a long time for me to manage to speak to those guys on the phone. I suggest to Members on both Front Benches that we should introduce a fining system. If it takes more than 10 or 12 rings for any of the big six to answer the phone and transfer callers to someone who can deal with their query, that company should be fined. I bet that if we introduced such a system, we would find that the energy companies hired more people and dealt with calls more efficiently, and switching—whether in 24 hours or not—would be much easier.
	Of course we need more new entrants to the market, but I have a further, serious criticism to make of the big six. They have described a margin of 4% or 5% as reasonable, which is an entirely spurious observation. I have no idea whether such a margin is reasonable, but the point is that we should evaluate them on the basis of their return on capital employed. A margin of 4% is a huge margin for a foreign exchange dealer and for a petrol retailer, but a very small margin for any other retailer. When someone asks if £7 million a day is too much profit or too little, that is a very hard question to answer. The big six are entitled to a reasonable return on their capital employed. We should focus on that, and they should focus on it too when they are telling us how reasonable they are.

Ian Lavery: Will the hon. Gentleman give way?

David Mowat: I am sorry; I will not.
	I understand that a former Prime Minister has suggested that, if we experienced a particularly cold winter and, as a consequence, the energy companies made more money than they had budgeted to make, a windfall tax might be an appropriate response. The companies could argue that something in the other direction should be provided in the event of a warm winter, but I agree with the former Prime Minister that if they make additional, incremental, supranormal profits over and above what they would have made in a normal winter, a windfall tax—or what a consultant would presumably describe as a profit-sharing mechanism—is fair enough.
	There might need to be structural changes in the industry. If the market is not working, I agree with the Opposition that they are entitled to intervene. We have just intervened in the private pensions industry. I campaigned for that, and it was right. If this market is not working, they are right to intervene. My problem is that I have looked very hard but I genuinely find it difficult to see the evidence that the market is not working to the extent that they say. We must remember, too, that we need these guys to put £200 billion into our infrastructure in the next decade.
	My third point is about what I consider to be our increasingly unilateral position on carbon emissions leadership. We need to have a grown-up discussion about this, and the House needs to understand that our carbon emissions are 20% lower than Germany’s per unit of GDP and per capita. We are not a high-carbon country, yet as we see Europe and Germany reining back—unabated building of coal-power stations and vetoing the emissions trading system and all that goes with that—it is not reasonable for us to be constrained by unilateral carbon leadership. If we are going to do that, we need to be honest about the cost. Frankly, too often people say some of these policies are cost-neutral or even cost-effective. They are not; there is a cost to them. It may be a price worth paying, and maybe we should pay it, but at least let us be honest.
	My fourth point is about the balance between regressive and progressive taxes. I agree that putting all these charges on to bills is particularly regressive, and if the current review finds that certain parts should come into general taxation, I will support that.
	My final point is that we should have more honesty in this debate. There is a cost to going green. It is not enough for those on the Front Benches to say that in 10 years’ time it will be seen to be more cost-effective to be doing this than not. That is quite unlikely; it is quite unlikely that we will discover we have to do these things for the sake of the planet, as opposed to burning coal, which would be much cheaper, and that there is no cost to it. There is a cost to this; we should take it on the chin and discuss things in that context.
	The energy companies should stop talking about their 4% or 5% margins, which is a ridiculous concept, and start talking about what their return on capital is. I do not believe it is an unreasonable return, although I may be wrong, but at least let us be honest.

Albert Owen: It is a pleasure to be speaking for the first time under your chairmanship, Madam Deputy Speaker, and I congratulate you on your election to the post.
	I am very pleased that the former Energy Minister, the hon. Member for Wealden (Charles Hendry), is still in his place, because he is right that there was consensus between my good friend the late Malcolm Wicks and him, and they had a good working relationship. When he talks about political risk, however, he should not look across to this side of the Chamber. He should look within his own party and within the coalition, and see the debate within the coalition, which is causing divisions on energy policies today.
	I am pleased this issue is high on the agenda. I have been banging on about energy prices for some time and I am glad it is now in the political mainstream. I am glad my party and party leader are leading on this issue, too, because I am afraid the Government are for ever in the wake on these issues. Only 18 months ago the Prime Minister had a summit in No. 10 Downing street. He was there for a few minutes—he was very busy—but he said he had sorted the energy companies out on prices. When I intervened on the then Energy Secretary, Chris Huhne, in a debate and asked him whether he had told the energy companies to hold their prices down, he replied, “No need, they’re already going to do it on their own”, but here we are today with rises in prices that people and business cannot afford.

Ian Lavery: My hon. Friend and I had the dubious pleasure of attending that Select Committee hearing last week, and comments about a modest return have been made here today, too. The Centrica boss said to the CBI yesterday that £2.7 billion was a modest return. That is £7.4 million per day, or £86 per second. Is that a modest return, or is it robbery?

Albert Owen: My hon. Friend will recall that I challenged the Centrica bosses. Indeed, I challenged the CEO of Centrica not to take his bonus this year, because his salary and bonus combined have gone up by 38% since 2008 while bills from his company have gone up by 36%. I am a customer of British Gas, although perhaps not for much longer. To be fair to the CEO, Sam Laidlaw, he has decided not to take his bonus this year. I hope that others will listen and follow suit, because it is immoral that these companies are saying, “We are making only a modest amount” yet they are paying themselves more than a modest bonus out of their profit. They tell us that the internal market between generation and retail is working okay and that they are separate entities, but they pay their bonuses altogether as one company, and they take a huge amount in dividends for their shareholders.

Jim Cunningham: Like my hon. Friend, I have raised this issue over a long period. I thought two or three years ago that we should have had a proper investigation into whether there is a cartel. When I was on holiday in Cornwall a couple of years ago, five tankers were lined up for a couple of weeks. If someone is telling me that something is not going on in that market, I do not know what to say.

Albert Owen: I used to work on oil tankers and gas tankers, and I know that they stay at anchor for some time waiting for the prices to vary before they empty their cargo and get the price for it. That is an important issue.
	The energy market is flawed, as Government Members have actually agreed. The Secretary of State, who made an appalling speech and left quickly, did not tackle the issues at all and did not come up with any suggestions. He said that the Government were doing things for the consumer, but the reality is that the Select Committee and others have been lobbying hard for Ofgem, the regulator, to help the consumer. It is doing slightly more but not enough—and it is too late. It is a disgrace that the Secretary of State leaves so quickly after making so many interventions in this debate—he is not even prepared to sit there. The energy team has been reduced by half a Minister, as one of them is doing a job share with the Department for Business, Innovation and Skills, yet the Secretary of State cannot sit down there. Instead he has to get a Whip to sit on the Front Bench because the team has been depleted. Energy is at the top of people’s agenda, but it is way down at the bottom of this Government’s priorities.
	The hon. Member for Warrington South (David Mowat) asked why, compared with Europe, we are paying less for our bills. One reason—I have told him this before and I hope he is listening—is that people in many other European countries pay VAT at 20% or more on their fuel and energy costs. I am sure that he is not suggesting that this country takes that approach so that we can make a comparison—

David Mowat: rose—

Albert Owen: I am not going to give way, as the hon. Gentleman has had a good number of interventions on that. VAT is one reason for the situation he describes.
	For other things the hon. Gentleman has to look not to Europe but to his own Front-Bench team, because the ECO—energy company obligation—was introduced this January by the Government. The Prime Minister boasted that it was one of his flagships of the greenest Government ever and about how the green levies were going up, yet only last week he said he was going to change all that. The Prime Minister is making policy on the hoof—I will never accuse him of being consistent on anything and he is certainly not consistent on energy policy.

Gregory Barker: Will the hon. Gentleman give way?

Albert Owen: Yes, I will. I hope that the Minister will give way when he is winding up, too.

Gregory Barker: Of course I will. Can the hon. Gentleman give me one example of when any Government Member boasted about levies going up? We may have boasted about policies, but when did we boast about levies going up?

Albert Owen: The Prime Minister has said numerous times on the record—I will find this and send it to the Minister—that his Government are the greenest ever and are putting on extra green levies; when he compares our schemes with the Government’s schemes he boasts that these levies are actually increasing to help on that. That is exactly what the Prime Minister has done, and I am sorry that the Minister does not understand his own Prime Minister—it is complicated at times.

Toby Perkins: rose—

Albert Owen: I will give way briefly, but I am cutting into my own time.

Toby Perkins: This is the quote that my hon. Friend was looking for. The Prime Minister told “The Politics Show”:
	“I think green taxes as a whole need to go up”.

Albert Owen: There we are. I am sure that the Minister agrees with the Prime Minister on that, and I thank my hon. Friend. Another levy that this Government have introduced unilaterally and which has pushed prices up is the carbon floor price. It is an Osborne levy if ever there was one. Again, the Government boasted in the Budget about how they were using these levies to control companies and push up costs on business. Those who blame Europe should remember that this is in addition to the European emissions trading scheme, and that companies in Britain are paying more because of what this Government have done this year—the levy came into being in April. It is no use their blaming Europe, or previous Governments. They must take responsibility, because all our constituents are paying the price of this Government's energy policy. That is why we are having the debate today.
	I want to mention small businesses, because they are suffering more than the domestic customer. Average rises for small businesses, which do not have the luxury of comparison sites on which they can switch easily, have been up to 20%. I hope that the Government—and, indeed, my right hon. Friend the Member for Don Valley (Caroline Flint)—will consider helping those businesses. They cannot absorb the cost, so they pass it on to the customers. That means that we pay for those rises.
	I am a member of the Select Committee on Energy and Climate Change and we had a robust discussion with the energy companies last week. Let us be honest. We hear the Government talking about Labour’s big six, and the Prime Minister leads that. They forget that in 1993, Sir John Major—that Marxist, who has been accused of being a red by many people for wanting to intervene in the market—set up the integrated system we have now and allowed the then big three to dominate the energy market. Let us not take any lessons about how the big six were set up. Flawed privatisation policies and the former Prime Minister’s interventions allowed the companies to be both generators and retailers. That is the situation. I know that it does not sit comfortably with the Conservative party, but it is a fact and I challenge the Minister to say otherwise.
	We have talked about green levies and wholesale prices.

Gregory Barker: I promise the House that I will not make a habit of jumping up and down to intervene before I get the chance to wind up. Will the hon. Gentleman give a little of his speech to the 13 years in which the Labour party had the opportunity to shape energy policy? Will he defend what went on in those 13 years?

Albert Owen: I am certainly happy to do that. I sat on the Committee that considered the Energy Bill in 2008, which helped many places. It even helped to set up the Hinkley Point agreement that we just reached. The Liberal Democrats voted against the Bill. The Energy
	Act 2010 gave more powers and responsibilities to the regulator to deal with prices. I remind the Minister that we did not get into office in 2010 and I wish that he would use those powers, which he and his party supported at the time. I am happy. We enacted the Climate Change Act 2008 and we set up the Nuclear Decommissioning Authority to deal with legacy waste in our country. We have a record of which we can be very proud.
	We are in the Chamber today after three years of a Government under whom we have seen rocketing prices, and all they want to do is blame somebody else. It is time the Government stood up and were accountable for their actions. The Liberal Democrats are helping them—I am not just having a go at the Tories. We need to get consumer rights, which is why I was happy to hear my right hon. Friend the shadow Secretary of State say in response to an intervention I made earlier that under a Labour Government, a new regulator would look after customers who were not on the gas mains. Switching and the reduction for those on dual fuel do not apply to lots of constituents in this country, and we need to extend the reach. I am very pleased by that commitment, because I have been asking this Government to introduce such a provision—I have asked each Minister, and there have been quite a few—and they have refused to do so.
	In this country, we need a party and a Parliament that stand up for the customer—for small businesses and individuals who, year after year, not as a spike but as a trend, are being ripped off by the energy companies. It is time for Parliament to act and today is an opportunity for us to do so. I am proud to support the motion tabled in the name of my right hon. Friend the shadow Secretary of State and my right hon. Friend the Leader of the Opposition. When we are in government, we will make the changes that the people of this country deserve.

Tessa Munt: Labour's 20-month price freeze has hit the headlines and will prove superficially popular with the voters, but there are many reasons why it will not work, much as we all want to reduce people’s bills. It is a hopeless strategy to try to control the sales price of businesses that have volatile raw material costs, because prices will go up before the freeze as companies try to hedge against the risks of a Labour election win. In fact, that has probably already begun. Prices will go up again after the freeze as companies seek to recover any losses that they think they have sustained.
	During any freeze prices will stay artificially high even if raw material costs go down. Having begun to take the drug of price fixing it would be hard to kick the habit after 20 months. Why not 24 or 30, or doing it again the following winter, or the one after that? The proposal risks further damage to the market as a result of uncertainty, which may well spread to other industries. There would be huge political pressure to freeze prices in other sectors, risking further chaos and a return to the situation facing us in the 1970s.
	This all has to be paid for—that is the economic inevitability. History shows that price fixing does not work and damages the economy in turn. The willingness of the right hon. Member for Don Valley (Caroline Flint) to interfere with the market would unsettle other sectors, break some smaller suppliers such as First Utility, which was promoted with the switch of the
	Leader of the Opposition. The supplier has gone public and explained that its most famous customer’s policy would put it out of business.
	The UK energy system clearly needs modernisation and massive investment. The proposed price freeze increases the political risks for this country and for its new investors. All of this will put up long-term prices—the consumer will pay. Any Government who freeze prices would undermine the role of the independent regulator, Ofgem, and no doubt would succumb to the temptation to recruit their own staff of bureaucrats and inspectors to enforce their policy.
	We should ensure that Ofgem does its job; keep up the pressure on the big six suppliers; look at encouraging more new entrants; do lots more to save energy in the first place; get a fair deal for people on pre-payment cards and meters; ensure that consumers receive bills that they can understand; support the development of many more green energy provisions on a local basis such as the Wedmore power co-operative solar array, which opened this weekend in my patch; and make it swift and easy to switch suppliers.
	Finally, it is unclear whether the shadow Secretary of State was advocating a windfall tax rather than a price freeze. However, such a tax seems to be a better idea by far as there would be an opportunity to redistribute any windfall to those who need the most help. Every pound spent to support those with disproportionately high bills, particularly on energy-saving measures for those very households, is a pound well spent. Planning a price freeze demonstrates a lack of understanding of business, and shows the impact of interfering in this market, which would cost consumers more, not less.

Tom Clarke: This is the first time I have had the privilege of speaking under your chairmanship, Madam Deputy Speaker, and I am delighted that you are a Deputy Speaker.
	We have had an interesting debate. I am sorry that the Secretary of State has left the Chamber, but I note that he apologised for doing so. I found it astonishing, however, that he asked for consensus, but went on to make one of the most provocative speeches that I have ever heard in the House, particularly on a subject where he is on a weak wicket. I can imagine going round my constituency speaking to elderly folks and people with disabilities, and people—far too many—suffering from fuel poverty and saying, “Well, we’re not doing anything about the cost of energy, but we’ve reached consensus.” I do not believe that consensus can be reached because, like many of my hon. Friends, I have been involved in these issues for more than 10 years. If right hon. and hon. Members have a minute or two, they might want to study the debate that I secured in Westminster Hall on this subject on 23 January 2007, in which the hon. Member for Wealden (Charles Hendry) made a good speech. I have to say, with respect, that I do not recall quite the emphasis on investment that we heard today; nevertheless, I cannot take away from him the points that he made on that occasion.
	A few weeks later I put a question to our own Prime Minister, Tony Blair, on 7 February 2007, and by a remarkable coincidence prices fell the next day. I am not sure that this speech will have the same effect, but I will make the points that I want to make and that, I am sorry to say, are not new because I and others have made them so often. That is why I do not believe that consensus is possible.
	I support the motion before the House and the proposition from my right hon. Friend the Leader of the Opposition and colleagues on the Front Bench. It resonates with long-suffering consumers. The commitment to a price freeze is absolutely right, and the fact that it is new, even from those on my own Front Bench, whether in government or in opposition, does not take away from its validity.

Jim Cunningham: Does my right hon. Friend recall that under the previous Conservative Government a big battle went on in the House one Friday morning, especially among Members of the governing party, in relation to an increase in cold weather payments that the then Government would not concede? Does my right hon. Friend recall that it was a Labour Government who created the Department of Energy and Climate Change, which the Minister represents? The Government say that the Labour Government did not take these matters seriously. We did, and we introduced housing insulation for the less well-off.

Tom Clarke: As always, my hon. Friend makes a valid point. I know that he represents Coventry South, but as he comes from Coatbridge, I am not surprised at the logic that he introduces to the debate.
	I support the motion before the House. I do not believe that some of the ideas that we have heard from Government Members, including from the Secretary of State, about tinkering around the edges, transferring green taxes to general taxation and other measures that have been mentioned for over a decade would necessarily work. We heard yet again about switching. Well, I hope it works this time. On previous occasions the experience of my constituents has been that no sooner did they switch to one company than that company put up its prices. There was therefore very little point in them taking that advice. I question whether switching will work now.
	Given the seriousness of the problems, there is a call for transparency. The veil of secrecy that exists in the energy industries is wholly unacceptable in the modern world, with the massive profits of energy companies and increasing fuel poverty. The energy markets are utterly broken. Surely we as a Parliament are not prepared to accept that without protest, and why should our constituents do so?
	In the Government’s response to today’s debate a great deal of faith was placed in the regulators, but I do not share it—not for one second. In the debate that I mentioned at the start of my speech I had quite a lot to say about the regulators.

Nigel Dodds: Rural areas and places such as Northern Ireland are heavily dependent on home heating oil, which means that energy bills are 50% higher on average than even the high bills that people in Great Britain are suffering, but there is no
	regulation of that sector of the energy market. Does the right hon. Gentleman agree that something needs to be done to help those families who are particularly hard hit by very high energy bills?

Tom Clarke: The right hon. Gentleman makes an excellent and very valid point.
	That part of the motion relating to the regulator is very important. I do not believe that Ofgem has done the job it was expected to do, no matter who set it up. I have met Ofgem, written to it and listened to what it had to say. It responded to one of our representations on 1 January 2007, the day after Hogmanay—Scots Members will understand what I mean—by issuing a press release stating that if the energy companies, the big six, continued what they had been doing, in its view they would have “jam on their fingers”. Given the figures on hypothermia even then—I will mention those later if I have time—it should have spoken much more strongly.
	We are entitled to ensure that the public are no longer duped about the actual cost of energy. I would have expected that to be the role of a proactive regulator. For example, the four major companies that have raised prices blamed wholesale prices, green levies and network costs for the latest bill increases of between £100 and £150, which have led to an average bill of £1,400 a year. In 2010 npower’s electricity wholesale prices fell by 13%, but that was not passed on to the consumer, and the average wholesale price fell by 4% in 2011 and rose by less than 2% in 2012, yet the company increased retail prices by 5.1%, 7.2% and 9.1% respectively in those years, and E.ON and EDF behaved likewise. More recently, wholesale energy prices rose by 1.7%, but consumers are facing an increase in their bills of 11.1%.
	How can that possibly be justified? How can it be said that the market is working and that if we leave it alone things will work out? I do not know about the word “cartel”, but I know that there appears to be a measure of collusion, and certainly a measure of delivering price demands to customers, that cannot be defended. I do not believe that Ofgem is best placed to act in our interests.
	I support the commitment to a price freeze and think that it is very welcome. It is right that my right hon. and hon. Friends on the Front Bench should demand action now. I accept that it will take time to sort things out. If we have not done it in the 10 years to which I have referred—we certainly have not—then 20 months is not a very long time to have the kind of open debate and consultation about energy that I believe the British people are entitled to expect. I also congratulate North Lanarkshire council on its commitment to its house insulation programme.
	I realise that many of these things are happening because of the austerity that exists in Britain today. Nevertheless, unless we have an energy strategy that is fair about prices, the environment, markets and proper regulation, our people will suffer. I do not believe that it is in the interests of right hon. and hon. Member to allow such a situation to develop or beyond the wit of this Parliament, and indeed this Government, to do something about it now.

Neil Carmichael: I think that this is the first time I have been in action while you have been in the Chair, Madam Deputy Speaker, so let me congratulate you on your election.
	It is a great pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke). I listened carefully to the hon. Member for Ynys Môn (Albert Owen), and I agree with his views about nuclear power. Nevertheless, I think that the Secretary of State made an excellent and powerful speech that drilled some very big holes in the speech by the shadow Secretary of State.
	We have to get three things across straight away. First, we cannot talk sensibly about energy policy without noting that commodity prices across the globe are rising, and it is therefore unacceptable to talk about this in a strictly local way. My hon. Friend the Member for Wealden (Charles Hendry) made that point very powerfully in connection with rising gas prices having affected overall energy prices.

Malcolm Bruce: The hon. Gentleman is making an important point. Does he think that the Labour party may have embarked on a process that will inevitably lead to a comprehensive prices and incomes policy, because when other prices go up, people will look for the same action in those areas? Have not we been there before, and was it not a very uncomfortable space to be in?

Neil Carmichael: That is a good point, and I will deal with it later. I thank the right hon. Gentleman for reminding me to mention it.
	Secondly, we cannot talk sensibly about this subject unless or until we understand the economic circumstances in which we live. A lot of people would say that we want lower energy prices, and absolutely we do—the Government are right to emphasise that—but we have to produce some economic growth to help to drive down prices and to drive up wages and salaries where appropriate. We have to get that on the table and well understood.
	Thirdly, it is a bit rich for Labour Members to claim that this is all our fault when during 13 years they did not build one single nuclear power station. [Interruption.] They did not, and we have got on with the job. The Government are absolutely right about that.
	My main points are these: first, commodity prices are global, and we cannot influence them globally but must respond to them sensibly and locally; secondly, we must consider the economic circumstances; and thirdly, we have the history of failure by the previous Labour Government.
	We have to increase capacity, and that is why the Energy Bill is so important. We talk about the big six, but in my constituency we have a large number of small companies and one fairly big one that is not a member of the big six but is a powerful beast nevertheless—Ecotricity, which is busy taking new customers from the big six because of the price rises. That is an example of effective competition being driven, and quite right too, by the arrival of more capacity.

Duncan Hames: I have a small competitor in the electricity supply market in my constituency as well. Does the hon. Gentleman recognise that these smaller
	competitors would be disadvantaged during a price freeze because in trying to buy energy on the forward market they lack the collateral that the big six have, and therefore, during that period, the big six would be advantaged over the competition?

Neil Carmichael: The hon. Gentleman is right—that is a perfectly good point.

Luciana Berger: Will the hon. Gentleman give way?

Neil Carmichael: Not yet, because I am dealing with this point. A price freeze simply freezes the problem and does not enable a solution to be introduced. I have admitted that we need to find ways of driving prices down—of course we do—but a price freeze is not the right way because it will prevent firms from responding normally to the market. As the hon. Member for Colchester (Sir Bob Russell) correctly noted, if we start freezing one thing it is not long before we need to freeze a few more things in order to keep up.

Several hon. Members: rose—

Neil Carmichael: I will give way to the hon. Member for Brighton, Pavilion (Caroline Lucas) if she is quick.

Caroline Lucas: That is immensely kind; I thank the hon. Gentleman so much. He talked about the smaller company in his constituency. If it is the one I think it is, its chief executive has said that the reason it was able to keep prices lower was because it had been investing in renewables, not getting hooked up in gas or other fossil fuels. Is that not the conclusion to draw from the hon. Gentleman’s remarks?

Neil Carmichael: That brings me to my next point, which is, ironically, that there is a tension between wanting to have lower prices and protecting the environment. I have often thought that the Department of Energy and Climate Change is both poacher and gamekeeper. We need to continue investing in green energy. I will always promote green energy because my constituency has a lot of important companies that are working extraordinarily hard to develop green technologies. However, we must respond to the price issue as well. That is why the Government are right to calibrate the green taxes more sensibly to reduce prices in the energy market. I get the sense more and more that the Opposition agree that the price freeze is simply idiotic.
	I will talk about two other important matters. The first is energy storage. We do not give enough attention to that subject. Energy storage technologies will help and we need to invest in them. I hope that we will see energy storage treated as a capacity in the Energy Bill and that it will be invested in. Liquid air, for example, provides us with an opportunity to store energy and thereby flatten out demand and sort out the trough problems.
	My hon. Friend the Member for Warrington South (David Mowat) spoke sensibly about the need to focus on making houses more energy efficient. Of course we must do that. We have the least energy-efficient houses in Europe in broad terms. We have to continue with the green deal. I am delighted that the Minister is promoting that and that it has got off to a good start. We have
	to ensure that our houses do not leak energy, but contain it and therefore use less of it. That is one way to reduce bills.
	Something that has not been discussed in the debate thus far is competitiveness, not just in this country, but across Europe. In January, the Prime Minister set out the stall for renegotiating our position in the European Union. One of the key points that he made was that we should strengthen the single market in energy. He was absolutely right. We have to recognise that there are lower commodity prices on the continent. We must be able to benefit from those prices. We need to attract investment from the continent and we must invest in the continent so that we have a more competitive and more connected energy policy.
	Connectivity is lacking in certain areas. We need more investment in our infrastructure so that we can be sure that whatever form of energy we alight upon can get to the right place in the most cost-effective and efficient way. That is definitely a way to drive down prices. We must set out the stall for increasing competition in the energy market both locally and internationally, with Europe as a target. That would not be a particularly difficult thing to do.

Alan Whitehead: The hon. Gentleman makes an important point about interconnectivity. Will he therefore explain why the Government have specifically excluded interconnections from their capacity market arrangement? Will he be at the forefront of trying to change that?

Neil Carmichael: It is always great to hear from a fellow member of the Environmental Audit Committee. He asks a very good question. [Hon. Members: “Answer the question.”] And he will get a very good answer. I am referring to connectivity across Europe. I do not think that the remit of the Energy Bill extends that far. There is not sufficient connectivity between England and France. There is no connectivity between Norway and—

Alan Whitehead: rose—

Neil Carmichael: No, the hon. Gentleman has had a fair crack of the whip.
	In summary, this is about powering through with more competition and ensuring downward pressure on prices, while recognising the global and economic challenges we still face, even though they are being rapidly dealt with by the Government. We cannot talk about a subject as critical as energy without considering those other issues—that is the key point on which I shall conclude.

Simon Danczuk: It is a delight to follow the hon. Member for Stroud (Neil Carmichael); I cannot think of anybody I would rather follow in this debate. I thank my colleagues for initiating this important debate. I want to use this opportunity to talk about my experience and that of my constituents when dealing with energy companies.
	I welcome the proposal from the leader of the Labour party to freeze energy bills, certainly for consumers but very much for businesses as well. In my constituency I meet businesses on a regular basis that have been treated appallingly by energy companies and/or their brokers. Businesses have been expected to put down unrealistic bonds or deposits so that they can get energy, and they
	are also being conned—quite literally—into energy deals that are wholly inappropriate for them. Action needs to be taken.
	Let us consider how consumers are treated by energy companies. Over the past few days there has been talk in the press about how energy companies are deliberately hanging on to their customers’ money. I am in no doubt that that is a deliberate policy by some of the energy companies, and I will give the House two or three examples of what energy companies are doing with their customers’ money.
	One example is something of which I have personal experience. Until two years ago I had a prepayment meter. Someone on a prepayment meter receives an annual statement that sets out what they have used and what they are likely to use in the next 12 months. It predicts how much energy someone will use, and what the likely cost will be. I decided, understandably, to move to direct debit to reduce the bill. I phoned the energy company—British Gas—and the call handler explained that they had to go through a process of assessing what my bill was likely to be. I pointed out that a prediction had already been made in the annual statement, but of course they insisted on going through the process of counting the number of radiators and asking how many people were in the household. Lo and behold, to nobody’s surprise the company suggested a higher direct debit on a monthly basis than what I had been paying for the past 12 months.
	In reality, the company was trying to bamboozle me into paying more per month. I am fairly forthright and insisted that it stuck to a reasonable amount of money, but my concern is that many people, particularly those on prepayment meters, are some of the most vulnerable in our society and could easily have been bamboozled into paying a higher direct debit than they should have paid. I am convinced that that call handler had been encouraged to take people down that route so that they would pay more.

Luciana Berger: I thank my hon. Friend for kindly giving way. He articulates an important point about vulnerable customers who are paying above the odds on prepayment meters. However, it is not just those on prepayment meters who pay direct debits; we all have the opportunity to do that. I have raised this point before in the House, but is my hon. Friend aware of actions by companies such as E.ON, which was previously my energy provider? I see myself as very forthright, but when I called it to amend my direct debit—I knew I was paying above the odds on a monthly basis—it would not allow me to amend it. I had to pay the price it offered me, and that was it. I had to pay above the odds, and it was essentially allowed to accumulate money from me. That was the only choice offered to me; otherwise I had to pay a quarterly amount, and a much higher price for my energy.

Simon Danczuk: I am obviously not aware of that particular case although I am happy to make representations to E.ON on my hon. Friend’s behalf, and try to get her a better deal. She makes an important point.
	My second example is from when I moved house, just over 12 months ago. I stopped the relationship with British Gas to move to another provider, yet the money it was taking from me continued to leave my account. I
	had to get on the phone and kick up a stink to get the money back. British Gas had retained literally hundreds of pounds that were due to me. That was being done to maximise its profits.
	Let me give the House a third example. This one is from a constituent, Alan Valentine, who contacted me this week because of the hullabaloo on energy prices. His mother died in March, and he paid the final bills using British Gas’s automated payment system. Needless to say, a company called Past Due Credit Solutions was soon chasing him for payments he had already made. Mr Valentine states:
	“I am concerned mainly that many thousands may be sent demands for bills already paid, many hundreds of whom may be elderly or forgetful, many of whom may then pay the bill again.”
	Those are clear examples of energy companies doing all they can to maximise their handling and holding of consumers’ money. Those behaviours are wholly unacceptable.

Stephen McCabe: Before my hon. Friend moves on from energy companies, does he find it perplexing that there seems to be no Government action against energy companies that are quietly getting rid of existing tariffs such as the E.ON pensioner fixed-rate tariff, which are designed to protect people? They are doing so in the name of Government policy—the policy of the Prime Minister—on reducing tariffs. What is fair about that?

Simon Danczuk: My hon. Friend poses a very good question. What is fair about that?
	Energy companies are quickly becoming the new banks. I am delighted that Labour is calling time on their behaviour. If the Conservative-Liberal Government will not take action, I am pleased that a Labour Government will.

David Morris: It is a pleasure to be in your presence while you are in the Chair, Madam Deputy Speaker. This is the first time I have spoken under your guidance.
	I want it to be known that I am not standing up for energy companies or anything to do with them. I am standing up for common sense and the consumer. All hon. Members are keen for energy prices to drop. I am proud to support the work of my right hon. Friends the Secretary of State for Energy and Climate Change and the Prime Minister. For the first time in decades, genuine action is being taken to improve our energy market. I really believe that.
	The right hon. Member for Don Valley (Caroline Flint), who is not in her place, said a lot about myths. All political parties like to talk about myths, but let us talk about reality. If a potential Prime Minister stands up in the Chamber and says, “I am going to freeze energy prices,” they will send the stock market into disarray. That is what happened. Overnight, £1 billion was wiped off the stock market in energy.
	I have two nuclear power stations in my constituency—energy is the largest employer in my constituency. Hon. Members can imagine the horror of my constituents who saw that. They knew immediately that the energy companies would react to safeguard their interests after losing £1 billion, and they hiked energy up by 10%.
	They then wanted their customers to sign up to a three-year freeze deal, which would completely negate what the Leader of the Opposition wanted to achieve. That is the reality of what happened.

Toby Perkins: Is the hon. Gentleman seriously saying that the price freeze offered by a number of companies recently—not any future price freeze—was linked to the Labour party conference? Is he saying that the Labour party conference announcement led to those price freezes? I have not heard anyone else make that case, so is that what the hon. Gentleman is seriously saying?

David Morris: I am referring to the announcement in the Chamber—obviously this is a more official domain than the Labour party conference.
	The three-year price freeze negated completely the policy. It seemed popular, people are still talking about it, and the press are talking about it with gusto. But the reality is that unless the energy industry is renationalised, that is how the markets will react. Last time there was a similar run, the Leader of the Opposition was Secretary of State for Energy and Climate Change. We had a price fix of three years. If he could not do anything against the markets when he was in power, what makes him think that he can do it now? It is all pie in the sky. In reality, the energy companies will carry on looking after themselves, the consumers will get the hike on the threat of a price freeze, and it will cause pandemonium among consumers, especially in their pockets.
	As I have said, my constituency has two nuclear power stations. The announcement by the Leader of the Opposition has the potential—if it has not already—to damage pension funds through the shares in the company.

Alan Whitehead: Because gas is the market maker, the two nuclear power stations in the hon. Gentleman’s constituency are making large amounts of additional money from the electricity they sell at gas market maker prices because they are not subject to the carbon floor price. Therefore they are completely insulated from the effects that he mentions. Far from being worried about the situation, I would suggest that they are worried about the possibility that the Government might remove the carbon floor price and thus remove the free money that they are getting.

David Morris: I disagree with the hon. Gentleman’s analogy. We are talking a lot about gas, but the two nuclear power stations are huge employers in my constituency. What is the Opposition saying to my constituents with the suggestion of a price freeze? Will there be a freeze on their wages? That is what would happen. How can those two new stations produce energy efficiently and make some profit out of doing so without passing the effect of the price freeze down to the people who work in the area? The local economy would be hard hit. It is one thing to announce price freeze policies on the hoof, but that is the reality.
	We are trying to be more responsible. I agree that we must take down green levies, which are a blight on struggling families. The average British family pays £112 a year because of green levies and I am delighted that the Prime Minister is taking action on that. We all support low-carbon energy production, but there is no
	point in confusing saving the planet with taxing people to death. We also need to invest in local energy production which is less susceptible to foreign crises and currency fluctuations. My hon. Friend the Member for Warrington South (David Mowat), who is no longer in his place, articulated accurately how the European markets are dealing with this problem. We can debate what sort of locally produced energy we should have, and I am very aware of people’s different views on that, but having local production is vital in my area for a variety of reasons, including the local economy and the cost to the consumer.

Bob Stewart: It is clear from what my hon. Friend says that we need more nuclear power stations. They will produce energy at the lowest price, so let us get on with it.

David Morris: My hon. Friend takes a Churchillian stance on this issue. We do need more nuclear power in this country and I have never made any bones about saying so. Under this Government, Britain has done well at improving homes to make them more energy efficient, and that cuts costs even at a time when costs are rising. I want us to go further and consider the possibility of tax breaks for companies that build homes with solar panels.
	We must push to bring more companies into the market. In 1997, there were 20 major energy companies; now, there are just six. The monopoly must be broken up, and that will never happen unless people are willing to switch providers. The Leader of the Opposition switched supplier. I do not want to ridicule him for that; I want to praise him, because he did the right thing. I just wish he would encourage others to join him, because this is one way of creating competition that will push costs down.
	There are more ideas than the ones the Department of Energy and Climate Change is working on, but whatever happens the public must be aware that while the Labour price freeze sounds attractive, it is fundamentally weak and will not lead to lower energy bills—it might even increase them. The truth is that there is no obvious solution to the problem, but by putting a number of measures in place we can take control of it. I support the work of the coalition on energy markets. For the sake of my constituents, I beg hon. Members on both sides of the House not to put that work at risk.

Michael Weir: I hope everyone in the House agrees that the rising cost of energy is putting huge strains on families throughout the country. The motion calls for a freeze on energy prices. That is superficially attractive, but it is mired in difficulties, not least because it freezes the inequalities in the system. It is true, however, that the energy companies have serious questions to answer about the reason prices are rising. Every year we are told that it is due to the wholesale price of energy, and the Energy Secretary repeated that in last week’s statement. However, the chief executive of Ovo Energy, appearing before the Select Committee and on TV this week, stated that the cost of gas he is buying is lower than it has been in the past four years. Ofgem originally questioned whether there had in fact been a price rise, before rowing back. Its position can
	best be summed up as: “It depends how you read the figures,” which hardly instils confidence.
	I fully understand that the situation is probably not straightforward, in that the need to ensure sufficient supplies well into the future and the volumes of energy purchased by the large companies, effectively as futures, as against that of smaller companies who may buy on the spot market, may make a difference, but both the regulator and the Department must act decisively. If there is any suggestion that wholesale prices have not risen as claimed, the rises must be cancelled or curtailed. It is not good enough to call for a Competition Commission inquiry. That will take years and we need quick action now to find out the truth of the claims. To that extent, I support the call to ensure that when wholesale prices are reduced they should be passed on to the consumer. The consumer is rightly suspicious and we require much greater transparency.
	I have said on other occasions, and will repeat it again, that we would be prepared to look at any proposals for reducing energy bills, but I have concerns about the Labour proposal for a one-off energy price freeze. What would happen, for example, if energy companies substantially increased prices prior to, or immediately after, the freeze? Would a Labour Government force a reduction? Would they bring in a permanent control of prices? How would they deal with the urgent need for investment in our energy infrastructure? In an intervention, I asked about contracts for difference and the pool system. Hon. Members will recall that contracts for difference were supposed to guarantee a price to stimulate much needed investment in energy infrastructure. I do not understand how that would fit into the proposed system.
	The right hon. Member for Don Valley (Caroline Flint) spoke at length about splitting up energy companies, but she seemed to be talking about the split between the two wings of energy companies—the wholesale and the retail supply side. That has dangers. Anyone who watched the recent “Dispatches” programme on energy prices would have seen what was said about E.ON and the rather unique way it deals with that. Apparently, the retail side makes no money because it pays huge rates of interest on money borrowed entirely from associated companies within the group. How will that be dealt with in the proposed system? E.ON is already effectively split between wholesale and retail, but that is not having an effect, because it is a matter of artificial accountancy, borrowing money from other companies within the group. As an alternative, we have proposed transferring from energy bills to general taxation the cost not of all green measures, but specifically of the fuel-poverty measures and the energy company obligation, which we calculate would reduce energy bills by 5% or about £70 each and every year—it would not be a one-off saving. This would have the added advantage of delivering a more integrated fuel-poverty programme than could be achieved if we left it to the energy companies.
	In the energy statement last week, the Secretary of State again repeated that the Government had taken powers to implement the Prime Minister’s promise to put everyone on the lowest tariff. I have pointed out before, and will do so again, that the measures in the Energy Bill will not have that effect. The Bill requires energy companies not to put everyone on the lowest tariff, but only to make the offer, which might be lost in
	the mass of paper we receive from them already. Is not part of the problem that there is such a lack of trust in energy companies that whatever they offer will be met with total scepticism by consumers, even when they offer free loft insulation or suggest the most appropriate tariff?
	The proposed changes will even fail to help the poorest in our society who have to rely on prepayment meters—this is another difficulty with the energy price freeze. For someone on a direct debit tariff, it might be fine, but anyone on a prepayment meter will still be stuck on a higher tariff, because generally their tariffs are higher than direct debit tariffs. If we are truly intent on ensuring that everyone has the lowest possible bills, these measures should not only operate within an existing contract, but allow people to move to a cheaper contract. Instead of freezing the price, we need to mandate that people be moved to a cheaper contract.
	Perversely, prepayment meters are one of the few examples where consumers pay much more if they pay cash in advance. That is important, because Citizens Advice Scotland recently issued an energy report showing that the majority of people coming to it with energy problems have trouble with prepayment meters. It cited examples of people putting £10 in a meter, only to see £7 taken to meet existing debts, leaving them with only £3 of energy, which is completely insufficient to heat homes.
	The motion calls on the Government to put all over-75s on the cheapest tariff. Although any help is welcome, it rather depends on the tariffs. If the cost of energy continues to rise, the amount payable will also continue to rise throughout the various tariffs, so this measure would not hit at the heart of the problem of the relative affordability of energy. It is not clear whether the motion intends that people should be put on the cheapest tariff that their present supplier offers or the cheapest overall tariff. The best option is to have a cheaper specific tariff that is identical across all companies and available to the over-75s. That would attack the problem. A system of higher winter fuel allowances for elderly people would also be a much better option. Furthermore, to take up the point raised by the hon. Member for Ynys Môn (Albert Owen) about off-grid consumers, I have tried repeatedly—and will do so again on 27 November—to raise in the House the idea of earlier winter fuel allowances for those off the gas grid.
	It has been interesting to listen to Labour Members. Understandably, they seem to have great disdain for the energy companies. I was particularly struck by the speech from the hon. Member for Glasgow Central (Anas Sarwar), who is no longer in his place. In a recent article in The Independent,however, I noticed that at the very conference at which Labour announced its new policy, it had a céilidh sponsored by Scottish Power, so it has not always been so reluctant to dance to the tune of the big energy companies.

Duncan Hames: I did not anticipate having the opportunity to speak, so I am grateful to you, Madam Deputy Speaker, for calling me and to colleagues whose speeches I have heard.
	It is important first to set out our objectives for energy policy, on which, even in this heated debate, a large majority of the House can reach a consensus. We
	want energy that is affordable and reliably available to businesses and households. We want to meet our energy needs in a way that also meets our commitments in the carbon budget to reduce carbon emissions and take responsibility for the consequences of our choices for the rest of the world. It is worth bearing in mind, in seeking to do all those things, that the question of affordability can be addressed not only through energy-specific policies but through wider economic policy.
	I suspect that energy is not going to get any cheaper, so it is important that we look to other mechanisms to make our energy more affordable. Above all, I would certainly agree with those who have spoken today about the need to become more efficient in our energy use in order to get the bills down. I also hope that we can support economic policies that will provide for growing incomes, so that people’s ability to pay their energy bills will be improved. That should be an objective of this Government and any other.
	My main interest in speaking in the debate is to elicit more detail from those on the Opposition Front Bench about the proposals that they want MPs to vote for this afternoon. The “deep structural reforms” that the right hon. Member for Don Valley (Caroline Flint) talked about introducing after a 20-month price freeze are worthy of closer scrutiny by Members on both sides of the House, but I lack any confidence that the interim measure of a price freeze would actually work. I want to ask some questions about that, and I hope that the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) will be able to answer them when he sums up.
	How long would it take to bring about a price freeze, once a Government Minister had decided to introduce one? Could he or she do it under their own executive authority? Would they need to put it to the Cabinet, or get a Government write-round to support the proposal first? Could it be done through regulations, or would it need to pass through this House? Would it require primary or even emergency legislation?
	I would be interested to hear how long it would take to implement such a freeze, regardless of which party was in power, if a Minister was minded to do so. That would also tell us how long the energy companies would have to respond to the situation before the Government were able to implement the freeze. Would it be possible for the energy companies, either under this Government or a future Government, to get price rises in before a freeze came into effect?
	What would be the consequences of a price freeze while it was in place? The right hon. Lady said that, even if wholesale prices were changed during a freeze, electricity suppliers would not feel the effect or need to increase their prices because they would already have purchased their energy on the forward markets. As I have tried to explain in earlier interventions, that will present a particular challenge to the very companies that I hope all Members want to have a greater presence in the electricity market, because those smaller companies are at a disadvantage compared with the big six when trying to buy electricity on the forward markets.
	It is not difficult to understand. An independent electricity generator entering into a contract to sell its electricity some time in the future to a supplier of electricity to businesses and other customers is giving
	up the opportunity to sell it to anyone else. It will therefore have to be extremely confident that the supplier will still have the financial strength to pay for that electricity later on. Generators look for collateral in those circumstances, and the big six clearly have the necessary collateral to see them through that process. It is much harder for the smaller, challenger companies.

Alan Whitehead: The hon. Gentleman talks essentially about the security of long-term bilateral deals. Does he accept that the effect of a pool, particularly a full purchase-in and a full buy-out pool, removes a number of the issues he has raised about the uncertainty of whether we can get a buyer and whether the person who is buying ultimately has the wherewithal to do so?

Duncan Hames: I thank the hon. Gentleman for that intervention. I said that I was interested in the long-term proposals outlined by the right hon. Member for Don Valley. However, I am talking about what happens during the period of the price freeze, before some of the changes she proposed come into effect; and I was highlighting the difficult position in which the small suppliers are left during that period.
	This issue relates not just to wholesale prices, as other increases in costs that suppliers will experience during this price-freeze period are relevant, too. Suppliers will experience regular increases in costs for distribution and transmission, and unless they are in a position to change their prices before the freeze comes into effect, that will be a direct hit. Although some Labour Members may believe that the big six can take that hit, it is a much bigger challenge for smaller competitors to be able to absorb it. In fact, a market in which losses need to be absorbed for a period of time before it is possible to break even acts as a barrier to entry. If we want a more competitive market, introducing a new barrier to entry and to the viability of new entrants will clearly not help bring about competition. In order to be able to grow market share, new entrants rely on people having an incentive to switch. I would be interested to hear what the Opposition think will be the practice of competition during the 20-month freeze. How possible do they believe it will be for the smaller competitors to challenge the big six during this period, or will it just be one of entrenchment for the big six companies?
	At the start of the debate, I asked whether the right hon. Member for Don Valley agreed with me—and she did—that it was in the long-term interest of consumers for Government policy to seek to reduce the cost of capital to businesses in the industry. If we enjoy in the future a very competitive energy market—after whichever Government have been busy reforming the electricity market—the lower the cost of capital, the lower the prices will be that consumers pay.
	It seems to me incontrovertible that an industry experiencing a Government intervention which forces a price freeze for a period of 20 months will have the effect of raising the cost of capital. Investors do not have to invest in the sector if they do not wish to do so; they can invest elsewhere. If they know that the Government have frozen prices, that will be a reason for the cost of capital to increase. Ultimately, that would push up prices for consumers, even after all the reforms that the shadow Secretary of State outlined. That would not be in the best interests of consumers. I do not believe that this idea is going to work.

Alan Whitehead: Perhaps the best thing we can do this afternoon is to shoot a number of canards standing in the way of grasping the central issue of how to reset the market in such a way that it will work in favour of consumers and customers instead of against customers’ interests. Frankly, saying that proposals to reset the market will lead to a deterioration in investment prospects or a loss of market value that will prevent people from investing is the first and one of the biggest of such canards.
	A substantial amount of investment is needed, but it cannot be judged on the basis of the interests of integrated utility management; it will come from companies investing in the wires, in smart meters and in new forms of generation that are independent of the utilities. Indeed, the balance sheet of the big six suggests that not a very high proportion of that £100 billion-plus investment is likely to come from them in any event. It appears that the factors relating to the investment will be manifold, and will not necessarily be related to the fortunes of the big six.
	To say that resetting the market will cause it to work in a terrible way in the future is effectively to say that breaking up what is currently a seriously dysfunctional system will lead to problems. That strikes me as a counsel of despair not just where the market is concerned, but where consumers are concerned, and it is, perhaps, the second big canard to be shot. It is claimed that the Energy Bill will put a number of things right, and it will, but what it will not put right is the malfunctioning of the market. What is extraordinary about the Bill—as with the energy reform White Paper that preceded it—is that the one thing it does not do is reform the energy market. It lets the market carry on just as it has in the past, and we know that the market is seriously dysfunctional.
	Bilateral trade that rolls down the curve conceals a considerable amount of what is actually going on. One might think, for example, that there is a relationship between the 24% profit that is made by generators overall and the 5% that is made by retailers, because one sells to the other, and one might therefore wonder where the missing money in the middle is going. In fact, much of it is going to people who are trading with themselves and “netting off” so that their trades do not appear as trades at all, or even creating trades close to gate closure in order to balance the two sides of the operation of an integrated company.
	We know that the energy market is pretty dysfunctional, and we know that it needs to be reformed. The question is, can we reform it by simply continuing with business as usual and hoping that Ofgem will continue to produce documents that aim to introduce a little more transparency to a market that, by definition, is largely not transparent, or should we do more to reset the market in favour of customers?

David Anderson: I apologise for not being in the Chamber earlier, Madam Deputy Speaker. I was at a Select Committee meeting.
	As always, my hon. Friend is speaking very knowledgeably, and he is making a good point about the dysfunctionality of the energy market. When, 25 years ago, it was first suggested that the market should be privatised, we were told that one of the key reasons for privatising it was that the risk would be transferred
	from the Government—from the public purse—to the private sector. Is not the truth that, in the last 25 years, the risk has been transferred from the Government to the private sector, and thence to the customer? The customer bears the risk whatever happens.

Alan Whitehead: My hon. Friend is right. The market tends eventually to land its risk, its transfer arrangements and its outcomes squarely on customers’ bills. The point about a price freeze is that it must be seen in the context of the other measures that it is being suggested should accompany it as a way of securing a pause while the market is reset.

Bob Stewart: For the sake of my education, will the hon. Gentleman clarify one point? It seems to me that if we had a nationalised energy company and the prices went up, there would be only two ways of paying for that: through the customer, and through the Government. Does the hon. Gentleman agree that, whether a company is nationalised or commercial, the customer pays in the end?

Alan Whitehead: The hon. Gentleman asks a rather complicated question. Currently, gas is the market-maker and companies that produce energy that is not gas-based sell their energy into the retail market at the electricity-equivalent of the price of energy produced by gas. It is to be hoped that one of the effects of energy market reform will be that a change in the balance of production, in particular as a result of increasing amounts of renewables, will mean that gas is no longer the market-maker. That is another canard that will need to be shot in the long term.

Bob Stewart: Gas is the most expensive?

Alan Whitehead: Obviously, the world gas price varies considerably. The UK market is currently based around the gas price. If gas is no longer the market-maker over the medium and long term, a number of interesting consequences will arise, particularly in terms of how we would relate volatile markets to retail prices.
	That is one of the issues that would be dealt with by the Opposition’s proposals to introduce a pool. If there is a pool into which everybody transparently sells their products and the pool then sells to energy retailers, that would deal with a number of problems that have arisen as a result of the imperfections in the market, and which would remain despite the Energy Bill trying hard to address them. If there was a pool, they would be dealt with even if gas was still the market-maker, but the market would be much more efficient in the long term if that was not the case.
	We should consider in this context the fact that independent generators do not believe they have a clear market for their products. That issue remains unsolved by the Energy Bill provisions. If there were a pool, it would be substantially solved in as much as they would know they had a buyer into the pool and a seller out from the pool. If the current dysfunctional market were reset in the way the Opposition propose—with a price freeze while the market is reset, a pool, and a regulator that can properly relate what is happening in world prices to how they are being passed on through the pool and out the other side—a lot of the issues we have been talking about today would become far more simple and transparent, and the future solutions would be customer-oriented.
	I do not say that that would solve the problem of increased energy prices in the future, because it is certainly true that world energy prices continue to increase and that there would be price increases for the consumer. It is not true, incidentally, that under those circumstances energy companies would simply take back the money lost during a price freeze, because there would be regulation reflecting world prices. Although prices have gone up, the world gas price has not gone up over the past year and a half. A fair relationship between world energy prices and retail prices could be achieved through a combination of new forms of regulation, an energy pool and a reset of the market.
	We must look at these proposals as part of a wider package that, at its heart, is on the side of the consumer. At present we have a dysfunctional market that will never end up on the side of the consumer unless it is fundamentally reset so that it points in the right direction. My sorrow is that, although the Energy Bill has many good provisions that deserve to be supported, it does not do that, and that is what the Opposition proposals are trying to do, and that is why they should be looked at seriously—

Dawn Primarolo: Order. Time is up. I call Debbie Abrahams.

Debbie Abrahams: I wish to start by putting the energy bill crisis into the context of the cost of living crisis. As we know, since May 2010 prices have risen faster than pay every month apart from this April. Why was April different? It was different because people on high incomes wanted to take advantage of the tax break that this Government had given them. We also know that one in four children live in poverty—in some wards in my constituency the figure is one in two—with the level set to increase in the next few years. By 2020, because of this Government’s policies, 1.1 million more children will be living in poverty. These are the choices that this Government have made.
	Escalating heating bills are a major factor affecting costs to households and to businesses. Last year those costs increased by between 6% and 11%, and since this Government came to power an extra £300 has been added to energy bills. So why is this happening? Until the last few months, this country had a flatlining economy—we have had three years of it. Although the growth over the past few months is welcome, if we had had just 1% growth since 2010 we would have generated £335 billion more in the economy, with all the associated jobs and personal income that that would have brought. If we had had 2% growth, we would have generated £551 billion, and many economists believe that that will just not be recoverable.
	Related to that situation has been the fact that pay has either gone down or been frozen. Some 400,000 more people are living below the living wage, bringing the number of those doing so up to 5.2 million. In Oldham, the level of weekly pay has fallen from £432 in 2010 to £426 in 2012, which is well below the regional and national averages. But this is not just about the Government’s mismanagement of the economy; they seem incapable
	of showing leadership and standing up for ordinary people against powerful vested interests. Too many big businesses have for too long been behaving unethically, whether we are talking about tax evasion or aggressive tax avoidance, cheating the Exchequer of up to £35 billion a year; large companies choosing to pay small businesses in their supply chain late—an estimated £30 billion is owed to small businesses in late payments; or the big six energy suppliers acting as a cartel, claiming that wholesale energy costs have driven up energy bills by 10.4% on average a year, whereas this actually costs them only 1.6% on average.
	I tried to intervene on the Secretary of State to make the point that this is happening at a time when these companies are publishing profits of £3.7 billion, which is an increase of 73% since 2010. According to Ofgem’s latest electricity and gas supply market indicators, the typical domestic dual fuel bill now stands at £1,420 a year compared with the £1,105 that it was in May 2010. But what have this Government done, apart from tell us to put jumpers on? Governments set the tone for the culture of a society. They do so not only explicitly through their policies, but by what they imply. It is clear from this Government’s policies and actions exactly where their priorities lie, and it is not with ordinary people and with addressing the inequalities and poverty that exist in this society.
	The effect is, as one would expect, fuel poverty. Its level had fallen in recent years, following the various energy-efficiency measures introduced under the last Labour Government, such as the Warm Front programme. But with rising energy bills swamping all that, even under the Government’s new definition of fuel poverty there are now 2.4 million people who are fuel poor, with the average household fuel poverty gap standing at £494.
	The Fuel Poverty Advisory Group warned in 2010 that instead of fuel poverty being eliminated by 2016, more than 7 million households could be fuel poor. In Oldham East and Saddleworth, 16% of households—8,000—are fuel poor. To help them, Oldham council launched a collective energy switching scheme that enrolled 22,000 households. The council admits, however, that that is not enough—and it is not enough.
	There are wider effects. Sir John Major has said that the real choice people face is whether to heat or eat. I am particularly concerned about this winter and its effect on the most vulnerable in society—older people and those who are ill or disabled. We know that on average 24,000 people, predominantly older people, will lose their lives every winter. Last year, however there was a 75% increase in the number of expected deaths, partly because of the increase in flu but also, according to statistical analysis, because of the extreme cold. It is inconceivable that heating costs will not play a part in the number of excess winter deaths we face, and it is just not good enough to say “Put a jumper on”. If we consider the issue in the context of the crisis in accident and emergency, we can see that there will be absolute meltdown.
	It is not only the elderly and the vulnerable who are affected. A constituent wrote to me who is a teacher with a young son of four and twin girls of 20 weeks. She lives in private rented accommodation with her husband, but the landlord cannot afford to update the boiler. She is not eligible for anything. She said, “Last winter was a
	nightmare. I have newborn babies; what am I going to do? What will support me? The heating costs are bad enough.” I have also had constituents, similar to those mentioned by my hon. Friend the Member for Rochdale (Simon Danczuk), who have written to me about their constant battles with the energy companies. It is just not good enough.

David Anderson: My hon. Friend is making a very serious speech. Is it not true that when we talk about professionals such as teachers struggling to find the extra money, they are the same people who have had their pay frozen for almost three years? The Government are now talking about freezing their increments, too. They are losing out twice over: costs are going up and their wages are stagnant. That is a direct result of the Government’s policies.

Debbie Abrahams: I could not agree more with my hon. Friend. It is a double whammy and the Government are doing nothing to address it.
	When the Minister replies, perhaps he can respond to the questions that my constituent has raised. What is she to do? She is working, so she cannot claim support to renew her boiler. Thousands of families up and down the country face equivalent problems and he must give a response on the difficulties mentioned by other Opposition Members.
	I wholeheartedly support the pledges made by my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Don Valley (Caroline Flint). We must overhaul the energy market, abolishing Ofgem and creating a tough new energy watchdog. We must require the energy companies to pool the power that they generate and we must require those companies to put all over-75s on the cheapest tariff.

Toby Perkins: I am delighted to have the opportunity to speak in such an important debate, because I believe that today we are discussing an issue that goes to the heart of the cost-of-living crisis that my constituents are living through day in, day out. We need urgent action to address the problem and I am pleased that that is exactly what Labour proposes today.
	Since the Prime Minister took office, energy bills have risen by almost £300 per family. Of course, we all know that when my right hon. Friend the Member for Doncaster North (Edward Miliband) was Energy Secretary, prices came down. During the debate, I have been saddened but also a little heartened. I am saddened because we have heard from a Government who are making it absolutely clear that they will take no action on one of the key issues facing my constituents. At a time when members of the public are calling so desperately for something to happen and we are hearing a Government who are so very much out of touch defending the status quo, I must admit that I was a little heartened to think that when we go to the next election they will have to look the electorate in the eye on the doorsteps, saying, “We were given the chance to do something, but we turned our backs on you and stood up for the big energy companies.” That heartens me very much in electoral terms, despite my disappointment about the impact on my constituents.
	Opposition Members have raised an army of straw men to explain why they cannot take serious action. It is not possible for anyone who is worried about energy prices to hear the speech of the Secretary of State and believe that things would be any different under him in future than they are today or than they were yesterday. He raised the green deal. The number of people assessed for the green deal would fill Old Trafford, but the people who have taken up the green deal would not even fill the Chamber. That is the scale of the failure.

Gregory Barker: The hon. Gentleman is absolutely wrong. He confuses the number of people who have taken up green deal finance with the number of people who have had an assessment and installed green deal measures. Once they sit down at their kitchen table, a surprisingly large number of people—thousands and thousands—elect to take all the savings immediately and install the measures.

Chris Ruane: How many?

Gregory Barker: British Gas alone has installed more than 10,000 green deal measures for customers who have elected to install them. Some 80% of people who have had a green assessment say that they have already installed measures, are currently installing measures, or are likely to do so.

Dawn Primarolo: Order. Interventions are brief. I allowed the point to be made, but that really was too long.

Toby Perkins: Just like many other Government Members, the more the Minister spoke the less he said. Seven people in the Prime Minister’s constituency benefited from that.

Chris Ruane: Six.

Toby Perkins: Was it six? I got it wrong. The measure is a pitiful failure and to hold it up as an example of a Government success shows how little the Government know and how little they are doing.
	In the few weeks since the Labour conference the Government have been in complete disarray on one of the central cost of living issues that we face. When I listened to the speech by the hon. Member for Morecambe and Lunesdale (David Morris) I was reminded of someone who thought that if we did anything to these powerful energy companies they might end up hurting us in return. Basically, we should just leave them alone, because if we did not they might up put up prices or not increase wages for his constituents. I was reminded of someone who thinks that the way to tackle a bully is not to tell anyone about what they are doing because the bully might get them after school. It was absolutely pitiful, and the hon. Gentleman’s constituents will have heard what he said—I am sure that they will be made aware of it—and they will know that he is someone who absolutely refuses to take their side or stand up to the big six.
	When we hear Government Members say that we need to put pressure on the big energy companies while at the same time coming up with a host of risible reasons for not taking action, saying that that would be dangerous, we know that the Conservatives and Liberal Democrats are not the answer to this problem.
	Prices are going up because when the wholesale price of energy increases the energy companies pass that on, but when it drops our constituents do not see a fall in their bills. If that sounds familiar to Government Members I would not be surprised, because it is precisely what the Prime Minister said when he was Leader of the Opposition. In Bedford in 2009, when he was still attempting to occupy the centre ground, he said:
	“I think we all feel that when gas prices or oil prices go up, they rush to pass the costs onto us and yet when we read in the papers that the oil price has collapsed and the gas prices are coming down, we wait for a very long time before we see anything coming through on our bills”.
	I could not agree more, and it is a shame that the Prime Minister does not say now what he did when he was attempting to be elected.
	Only last month, Which? estimated that flaws in the market have left consumers paying £3.9 billion a year over the odds since 2010. We have a duty to our constituents to end this great rip-off. One-nation Labour has a long-term vision to do just that—not simply with the energy price freeze but with a suite of measures that will radically transform the market. There are three steps that will make a significant difference, including, first, separating the parts of the business that generate energy from the parts that sell to consumers. My hon. Friend the Member for Southampton, Test (Dr Whitehead) was excellent, as he always is, on the importance of this, setting out its real value. Secondly, we would introduce a simple new tariff structure and make sure that people over 75 always paid the lowest tariff. Thirdly, there would be a measure to abolish Ofgem, which has failed to stand up for consumers, and to replace it from January 2017 with a new energy watchdog with teeth.
	The 42,000 households in my constituency cannot wait for those proposals to bear fruit. They need action now. They need a Prime Minister who is not strong on the weak but who is brave enough to stand up to the energy companies and deliver a price freeze. An incoming Labour Government will legislate with immediate effect to make this happen and will put an average of £120 back into the pockets of every household in Chesterfield. Unfortunately, the response of the Prime Minister and the response that we heard from the Secretary of State was once again to stand up for the wrong people and to take the side of vested interest. It seems that the Conservatives will do anything to prevent the big six from having to reduce their profits.
	Instead, the Prime Minister has suddenly turned on the evil of green taxes. As my hon. Friend the Member for Ynys Môn (Albert Owen) reflected earlier, green taxes are so evil that he told “The Politics Show” in 2006:
	“I think green taxes as a whole need to go up”.
	In 2006 he told “Newsnight” that
	“we think green taxes should take a bigger share of overall taxes.”
	So evil were these green taxes that his Government introduced 60% of the green levies currently imposed on energy companies. We all remember when the Prime Minister was the Leader of the Opposition and was attempting to present the modern face of Conservatism. He has certainly travelled a long way from “vote blue, go green”. He has shot the husky and simply told people to pull up their hoodie. He is not standing up on behalf of the people in my constituency.
	The Prime Minister has not explained how, when he abolishes the green levies, the burden will move to general taxation. Where will the money come from? I do not believe the Government are going to increase taxes. That leaves one of two possibilities. Either it will go on to the deficit, which the Government have so singularly failed to eradicate in the way they promised, or they will reduce the budget for schools, hospitals, roads or other Government Departments. We have had nothing from the Secretary of State or Ministers about how they propose to fund those measures from general taxation. It was interesting that in the Secretary of State’s entire speech, he did not once mention the idea of getting rid of green levies and raising the money from general taxation. That spoke volumes about the extent of the disarray that the Government are in.
	The issue is not just the impact on consumers. Labour is very much the party of small business. Our policy of an energy price freeze is an example of that. Annual energy bills for small businesses have gone up by an average of £10,000 since 2010. Small businesses will benefit hugely not just from the price freeze, but from a market that works for consumers. In addition, our plan to cut business rates for small business would mean an average saving of nearly £450 for 1.5 million business properties. These two policies demonstrate to small businesses that it is only Labour that will stand up on their side and cut their costs so that they can reinvest in new jobs and new products. Labour’s policy is good for consumers, good for business and good for the economy. I am proud to say that I will be supporting it and voting for it today.

Sharon Hodgson: There are 6,196 households in my constituency that are in fuel poverty, using the 10% of income measure, but those statistics are from 2011 and are the most recent. Since then prices have risen at least twice, while real wages are stagnating, so I am sure those figures will be much higher now. Energy prices are a key driver of the Prime Minister’s cost of living crisis, which has seen on average £1,200 wiped off the real value of the annual incomes of working people in the north-east.
	Those fuel poverty figures do not tell the whole story. They do not show the households on the borderline of fuel poverty or those that may have a decent income, but for which energy costs are just one of a number of ever-rising costs that they have to meet, such as rent, child care bills, kids’ clothes, school uniforms, food and groceries. It is this reality that this Prime Minister and this Government do not understand. It is all very well telling people to wear a jumper around the house. Does the Prime Minister not realise that people do that already, my family included?
	In the north-east, where it gets cold from September onwards, we put blankets over our legs when we watch telly. Some people even use quilts to keep warm, especially the elderly. There is a whole north-south divide element to this debate that needs to be addressed. As someone who lives in both places all year round, I know that there is regularly a 10° C difference, and that is without the added wind chill factor. According to the BBC’s weather forecast, at 4 o’clock today, when I last checked, it was 14° C in London and 8° C in Sunderland, and that is a mild gap. What about those who have to wear
	jumpers or layers of clothing when they go to bed at night because they have been unable to put the heating on all evening, or all week?
	Why are energy prices rising? As we have heard, average wholesale prices have risen by just 1.6% a year since 2011, which accounts for around £16 of the increase in bills since 2011, but consumers’ bills have risen by 10.4% on average. That is six times more, at around £100 a year. That is being used to fund the fat-cat salaries of the big six and double the profits for their shareholders. Are Ministers really telling the residents and small businesses of Washington and Sunderland West, including the 6,196 households living in fuel poverty, that they would rather stand up for the right of the big six to boost their profits than for the people they are elected to this place to serve?
	We must not lose sight of the fact that it is still the very poorest and most vulnerable of my constituents who pay the highest unit costs for their energy because they are on prepayment meters. They cannot switch to cheaper rates because there is very little competition, if any, for their business. They cannot pay a set amount by direct debit each month to spread the cost of winter over the rest of the year because the energy companies will not give them that credit facility. If they cannot afford the £10 to top up the meter, the lights and boiler just do not go on.
	The energy company executives who appeared before the Energy and Climate Change Committee last week assured my hon. Friend the Member for Glasgow North West (John Robertson) that they would not cut off the elderly or disabled this winter, but those on prepayment meters cannot just keep using their heating; they are cut off the minute they run out of money or emergency credit.

David Anderson: My hon. Friend will remember from the days when she worked with me in Unison that we had discussions with the energy people when they changed to prepayment meters, meaning that people now self-disconnect. Companies can now say that they no longer cut people off or have responsibility for that, but those people are forced to disconnect themselves. The number of people in this country who live without access to heat, fuel and warmth because they have no choice is hidden, and that is a disgrace.

Sharon Hodgson: My hon. Friend makes a very good point. I would like to know what advice the energy company executives will give all those people. Will they offer them a deal they can afford in order to keep warm this winter, as they said they would during the Select Committee hearing?
	I am going to share something quite personal today. I know that there are some MPs, although not many, whose background is similar to mine. I grew up in poverty. I know what it is like to have no central heating, and I know what it is like when you then have central heating not to be able to put it on because your mam cannot afford it. I know what it is like to wake up so cold that you cannot bear to undress to get washed and ready for school. I know what it is like to have a thick layer of ice on the inside of your bedroom window—I used to think everybody did in winter. I know what it is like to have the electricity man knock on your door and cut of your power when you are 13-years-old and minding your two younger brothers while your mam has popped out to see your nanna because it is the
	middle of winter. I know what it is like to sit and wait, scared in the cold and dark, until your mam comes home, trying to keep two little boys occupied and make them feel safe.
	That was in 1979, the first year of the previous Tory Government, and the year I was politicised and realised what it actually meant to have a Tory Government. My mam was not feckless; we were poor. There is a difference. A lot of people living in fuel poverty today are working. They are not feckless either, but there is a cost of living crisis beyond their control and not of their making.
	I know that 34 years later some families still have experiences similar to mine. I remember talking to a member of staff at a Sure Start children’s centre who told me about the mothers of young children who often came to the centre with their child for hours at a time because it was warm and they were unable to use their appliances or TV at home because they could not afford to top up the meter.
	I have recently heard about heat buddies in the north-east—groups of people who go to each other’s homes in turn to save heating their home in the evening. I have also heard that bath houses are being requested—in 21st-century Britain—because people do not have the money to heat their homes or water, so they wash with a kettleful of water in a sink and cannot face even trying to boil enough water for a bath as their home is too cold for them to bathe in. For goodness’ sake, Mr Speaker, what sort of country are we living in? Is it Victorian Britain? Is it Dickensian Britain?

David Anderson: Tory Britain.

Sharon Hodgson: Tory Britain—exactly. What are the Government doing for these people? What they need—what we all need—is an energy market that is forced to work in the interests of consumers, not shareholders. But until a Labour Government have the opportunity to make the required changes stated in the motion, they need a Prime Minister with the bottle and the guts to tell the energy companies that enough is enough—that people in 21st-century Britain should be able to have a bath in their own home and to go to bed warm enough to wear just a nightie or a pair of pyjamas, and not to die because of the cold with central heating they cannot afford to use.

Toby Perkins: I very much appreciate what my hon. Friend is saying—she is making a very powerful speech. The problem is not that the Prime Minister does not have the courage to stand up to the energy companies; it is that it is not in his make-up to stand up to the energy companies. It is not what he wants to do; it is not what he came into politics to do. He is not in politics to stop the energy companies making profits and to make consumers better off.

Sharon Hodgson: Is not the country all the worse for that? Well, I hope that the Prime Minister and his Government sleep warm in their beds at night, because huge numbers of people in the country he governs certainly do not, and will not this winter.
	I would like to wrap up my remarks by quoting some extracts from a letter that I received a couple of weeks ago from Mrs Templeton, a constituent of mine from Biddick in Washington. Mrs Templeton wrote:
	“I am writing to say how disgusted me and my hubby are about the rise in energy prices…Mr Miliband says he will freeze prices in 2015, but what can be done now?...I cannot believe the country
	is taking this on the chin...we should fight back…The top people in these companies will not worry about the increase, but believe me, most of the country are afraid of putting their heating on.”
	There are millions of Mrs Templetons across the country—people who are sick of their bills keeping on going up but never coming down, sick of seeing energy companies’ profits ballooning while they have to choose between heating and eating, and sick of this Prime Minister doing nothing about it but defend the status quo. If he does not have the strength to fight back on behalf of Mrs Templeton and all those other people across this country, I suggest that he should stand aside and let someone who does do so.

Luciana Berger: It is an honour to follow my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who made an impassioned speech. I seek to echo some of the points she made and to speak strongly in support of the Opposition’s motion. I do so as the MP representing the constituency with the third highest level of fuel poverty, according to the Government’s new definition.
	Not a week goes by when I do not have a constituent come to me to raise their serious worries about their energy bills. That is sometimes because they have been ripped off by their energy company. We have heard many examples of people who have paid above the odds for their direct debits or have been penalised when they have moved and have not received the credit to which they are entitled. We have heard about specific issues to do with people who have prepayment meters but often find that very difficult and have to pay over the odds in any repayments that they have to make. I speak in support of the motion on behalf of all my constituents and people right across this country.
	The constituents we represent, and people up and down the country, are paying a staggering £315 more for their energy bills than they did back in 2010. That is against the backdrop of a cost of living crisis in which people have seen prices rise faster than their wages in 39 out of the past 40 months. Many of my hon. Friends have talked about the real choice that people in our country—the seventh most industrialised in the world—are having to make between heating and eating. That is not a joke or a catchphrase—I have seen it on far too many occasions, as have many of my hon. Friends. We are the only G7 country in which the Red Cross is providing emergency food aid. It does not help that people are having to spend £1,400 a year on average for their dual fuel bill, but have not seen their wages go up accordingly.
	Some 700,000 people have accessed emergency food aid through a food bank. That is a national disgrace. The responses that the Prime Minister has given from the Dispatch Box at Prime Minister’s questions have been pitiful. He has not acknowledged the depth of the problem in this country. It is a stain on our national conscience. I am ashamed that people in my constituency have to go to a food bank because they cannot afford to put food on the table. To link that point back to this energy debate, people are often unable to use the goods in the emergency food aid bag that they receive from the Trussell Trust because they cannot afford the gas that it would take to heat them up on the cooker.
	Those are the issues that our country faces in 2013. I look forward to the Minister’s response because what the Secretary of State said was pitiful. He talked about switching, but for all the people who are facing a very cold winter, the best deal in a broken market is not a good deal. The figures that were released yesterday showed that the gap between the wholesale price and the prices that energy companies are charging us is getting wider. The wholesale price has gone up by 1.7% and the average bill has gone up by 9%. At a time when people are struggling to get by and there is a cost of living crisis, it is difficult for people to deal with those price increases.
	That is why I support the Opposition motion. We need a price freeze. The Government have an opportunity to implement the price freeze today. I sincerely hope that they will, even though the Secretary of State indicated that they will not. A price freeze would assist 40,221 households in my constituency alone. It is not just households that will benefit, but businesses. We need a price freeze so that we can implement the raft of measures that are needed to reform the market. I notice that many Government Members are fixated on the freeze. The freeze is the vehicle by which we will implement the changes in legislation that are needed to fix the market.
	What are the changes that are required urgently? We need to separate the retail market from the generation side. I mentioned in an intervention on my right hon. Friend the Member for Don Valley (Caroline Flint) that I have been to one of the energy companies. I saw for myself the physical collocation of the generation and retail sides. The room in which the company oversees its generation—the big six generate 70% of the capacity in the UK—is right next door to where it buys and sells its energy. The idea that the two sides do not liaise or engage with each another is ludicrous. That is why we need urgently to separate the retail side from the generation side.
	We need to introduce a two-way pool in the energy market so that there is transparency in the cost of energy generation, which we do not currently have. It is in the best interests of the energy companies to charge themselves a high price. We do not know what that price is because it is decided in back-room deals among themselves. There is a pool, but it makes up only a fraction of the market. We need the whole market to use the two-way pool so that we can see the price of energy and to encourage new entrants into the market. At the moment, the big six dominate the energy market, making up about 99% of it, and there is little opportunity for new entrants to come in.
	We need to have standardised tariffs so that people can compare energy prices properly. At the moment, the tariffs are very confusing. People need the switching websites because they cannot compare prices for themselves. The previous Secretary of State for Energy and Climate Change told the Select Committee that when he had tried to switch, he could not do so because it was so complicated. There are hundreds of tariffs. If we had standardised tariffs, people would be able to compare prices easily.

Sharon Hodgson: My hon. Friend is making an excellent speech. Does she agree that it is important that over-75s are put on the lowest tariff automatically, for the very reasons that she has just given?

Luciana Berger: I thank my hon. Friend for that intervention as I was just about to make that very point.
	I am delighted that the motion reinforces our policy that energy companies should automatically put over-75s on the cheapest tariff. That would assist 5,867 people in my constituency, and constituents of hon. Members across the House. Older customers are less able to benefit from direct debit deals because they are less likely to have access to a bank account, or access to the internet to get online deals. It is possible, perhaps through data-sharing, for energy companies to put the over-75s on to those cheapest tariffs. They could do that today and make a real difference to hundreds of thousands of pensioners up and down our country.
	I am supporting the motion today because we need a tough new watchdog. We know that Ofgem is not doing a proper job because back in 2008 it was investigated, and 16 different areas identified.

Debbie Abrahams: Does my hon. Friend want to comment on what the Secretary of State said about Ofgem and that report? Does she think Ofgem is doing a good job?

Luciana Berger: I thank my hon. Friend for that contribution. Back in 2008, 16 areas were identified where Ofgem was not doing a proper job. The other year it was found that it had improved in only four of those 16 areas which, over that time, is frankly not good enough. When millions of our constituents and businesses up and down the country are suffering, we need a proper regulator with teeth, as well as the responsibility and ability to ensure that when there are reductions in wholesale costs, those reductions are passed on to consumers in way that is not done at the moment.
	The Secretary of State was keen to talk about the green deal and the energy company obligation, which the Government have presented as a sort of quick-fix. Of course we need to do everything to ensure that we help millions of households across the country that do not have proper insulation in their homes, as that is one of the best ways to reduce bills. What the Government have proposed, however, and what they are doing on the green deal—well, the figures speak for themselves and we wait to see what will happen by the end of the year. The Minister said he would not be sleeping at night if 10,000 homes had not had a green deal package, but we wait to see the figures.

Gregory Barker: Well over 10,000 homes have already installed green deal measures.

Luciana Berger: I am referring to figures of those that have actually completed. I return to my point that we have the green deal in hand with the ECO, and thousands of people in the insulation industry have lost their jobs.
	Let me mention an actual individual. Mr Sturdy in my constituency is 85 years old. He has previously had a stroke, suffered from angina, and undergone a quadruple heart bypass. He has been visited in his home three times by three separate companies purporting to help him with the energy company obligation. Separately, his energy company, SSE, said “Go to Carillion as it will help you with the energy company obligation.” He has paid hundreds of pounds to get his loft cleared and his thin insulation removed, yet all those companies cannot provide him with the insulation he needs. He has spent hundreds of pounds and his home is now less well insulated than it was before. He is facing a very cold winter and I hope the Government will address that in their remarks.

Michael Meacher: I found the Secretary of State’s speech one of the most disappointing and unconvincing that I have heard for quite a time. It seemed to me that he was quite rattled—at times shrill; at times patronising—and perhaps that explains why he fled the Chamber the second it was over. He appealed for consensus with the Opposition at the start, but only on terms that suit his friends in the big six. His only proposal to reduce prices was by competition, which everyone can see has patently collapsed in the present semi-monopoly system. He had no plausible answer whatsoever for stopping the current gross overcharging. He spoke about transparency—which, of course, we all want to see—but never explained how the present excessive opaqueness could effectively be remedied within the present system.
	It needs to be said at the outset that whatever opinion people in the Chamber, or outside, may have about an energy price freeze, this necessary examination by Parliament of the cost of living in general, and the cost of energy for the nation in particular, would never have happened had the Leader of the Opposition not put down a very powerful marker in his conference speech two months ago. The debate has thrown the Government into a tizzy, which they do not know how to handle. The Prime Minister was rushing around threatening to remove the green levies, which is the opposite of what he said a few months ago, and apparently forgetting that this is supposed to be the greenest Government ever. He was even beating his chest threatening all manner of action against the water industry for its price rises.
	The Secretary of State was jerked into action, threatening to criminalise market manipulation, demanding yet another Ofgem investigation—is this the 18th?—into company profits, and proposing to speed up switching suppliers from five weeks to 24 hours, which is unworkable, because if all suppliers put up prices by roughly the same amount at about the same time, which is the experience we have had, it will make no difference.
	The key point is that none of that flurry of activity to protect the consumer would have happened had not my right hon. Friend the Leader of the Opposition made a commitment to real action, which two thirds of the electorate immediately hailed as exactly what was needed. It is absolutely extraordinary that the Leader of the Opposition, who currently has no executive power at all, has exercised more influence over Murdoch and BSkyB, over Leveson and press regulation, over Syria and starting another war, and now over energy pricing and the cost of living, than all members of the Government put together.
	Let us be clear on the key point, which is rather different from the understanding of many Government Members. An energy price freeze is not a policy programme in itself—of course it is not—but merely an important element in wider reform. As Opposition Members have made perfectly clear, it will be followed by a return to trading energy through a pool system, which will be more transparent than the current system, together with separation or unbundling of the different arms of the energy companies. They are currently vertically integrated, which means that they can both generate
	energy and supply it to the customer, which makes it very hard, if not impossible, to assess the extent of their profits, because they trade with themselves and with one another.
	There are good reasons to review the current energy market structure and the business model on which it is based. Ever since Kyoto, global warming has made mitigating CO2 emissions the dominant challenge. The decline in the UK’s indigenous natural gas fields has made ensuring the security of supply and managing the energy sector’s impact on the balance of payments key objectives. Whether the liberalised market alone is capable of achieving those objectives automatically can be questioned—[Interruption.] Well, experience has shown that it is targeted on micro-efficiencies and on extracting egregious profits.
	What has happened in the past two decades to deal with that policy fragmentation? There has been a persistent accumulation of directives, rules and subsidy schemes that are intended to cure the liberalised market of its intrinsic indifference to decarbonisation and the security of supply. All that has been programmed and overseen by a growing army of regulatory bodies, quangos and advisory institutions. We have thus ended up with the worst of both worlds—a byzantine industrial structure theoretically co-ordinated by the market mechanism, but one that nevertheless requires omniscient policy makers to mastermind everything it does. I submit that that is not sustainable.
	With or without a price freeze, we face the distinct possibility of a capacity shortage—in other words, the lights going out—by the middle of this decade. If the lights go out, it will not be because of a temporary price freeze; it will be because a market based on a private oligopoly has not concentrated, and perhaps cannot be expected to concentrate, its efforts on fundamental issues of national security rather than on the short-term gains of senior executives and shareholders. Surely the lesson is that restructuring a broken and dysfunctional market is the key to solving the problem of crippling rises in energy prices.
	As an emergency measure to stabilise a situation in which price hikes have clearly got out of control, and to provide leeway to introduce wider reforms, a limited price freeze is certainly needed. It is also justified, as other hon. Members have pointed out, when Ofgem data suggest that wholesale prices over the past year have been almost flat—rising by perhaps 1.7%—but retail prices are now being pushed up by the big six by between 8% and 11%. Indeed, according to Ofgem, some of the big six have seen their wholesale prices actually fall over the last three years.
	The Prime Minister’s itch to roll back the green levies is a false economy, and not only because they represent such a small component of the rise in prices. The Department of Energy and Climate Change estimates that the full range of green policies—I am referring to the energy efficiency savings from earlier Energy Bill-funded schemes, the impact of policies on wholesale prices, boiler regulations and the EU minimum standards of electrical efficiency—will cut typical gas bills by 1% and electric bills by 11% in 2020.

David Anderson: Ever since the Leader of the Opposition made his speech in Brighton and we came back to Parliament, this issue has dominated the parliamentary system, especially in the Whitehall farce we see every week that is allegedly called Prime Minister’s questions, but should really be called Prime Minister’s deflections. We have had a series of throwaway remarks from the Prime Minister about the price freeze issue. He said last week that the problems could be resolved if everybody did what our leader did and switched companies. The Government have blamed the price rise in wholesale gas, but last week the Prime Minister came back and asked, “Who created the big six?”, as if he had not spent the last 42 months in power doing nothing about the power of the big six. That is all good knockabout, music-hall stuff, but I bet the people of Oldham, Liverpool and Washington, who have been spoken about in the last half hour, are not laughing as they sit at home shivering and wondering how they will pay the bills over the next few months.
	Let us look at the Prime Minister’s case. Last week he had a go at our leader for switching electricity suppliers. Well, our leader is a canny lad and he might have saved himself £500 a year. But we need £110 million of investment, and it is a farce for the Prime Minister to point to an amount of £500 as a reason why we should not do something. He has blamed wholesale prices and said that the Government cannot control the markets, but privatisation was supposed to transfer the risk from the state to the private companies. Instead, it has transferred the risk directly to the people who cannot afford to pay—our constituents.
	This is also a question of trust. Are we being told the truth about wholesale prices?

Tom Clarke: I welcome the fact that my hon. Friend refers to wholesale prices. Does he believe that the regulators are as transparent as we would expect them to be when they examine something as important and influential as wholesale prices?

David Anderson: The regulator clearly admits not being fit for purpose. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned the report from 2008. Ofgem said then that it had not been transparent. The actual gas wholesalers are not transparent. I do not know whether hon. Members are familiar with the Henry hub, which is a pipeline and hub in Louisiana that distributes the vast majority of natural gas in the United States. It is also used as the name for the pricing point for gas prices on the markets in New York. Those prices are set in dollars per million BTUs—British thermal units. In April 2012, 1 million BTUs cost $1.95. In June 2008, they cost $12.6. So the cost was six times lower in April 2012 than it was in June 2008. Even now, it is only $3.62 per 1 million BTUs, yet we are told it has to go up because the price has gone up. How can we trust people who manipulate the figures?
	On 6 September 2013, the US Energy Information Administration stated:
	“The 36% decrease in the average natural gas price paid by manufacturers between 2006 and 2010, from $7.59 to $4.83…was large enough”—
	but—
	“Since that survey was conducted, natural gas prices have fallen further.”
	The people responsible for energy in the US are saying that prices have gone down, but we have been told that bills have had to go up so much because wholesale gas prices have gone up so much. Are we being misled? Is there a cartel? People say that there is not, but have we forgotten about OPEC? Have people forgotten what happened to us in the 1970s, when people literally had us over an oil barrel? Why should we expect more today from the same people?
	The Prime Minister’s other deflection was about who created the big six. I will accept some responsibility, because I believe that my party did not do enough in government to control the energy market. Up until 2008, we did not get our act together and the huge price increase seemed to wake people up. The Conservative party, however, cannot get away from its history. It created the big six by its decision, in the 1980s and 1990s, to privatise the utilities industries. The Conservative Government started by dismantling the most technically advanced coal industry in the world, an industry that was leading the world on clean coal technology—could we not use some of that now? They then went and told Sid to buy shares in gas, electricity and water. They were actually using public money to bribe people to get themselves back into power. It worked very well for them, but the chickens are coming home to roost and the people feeling it are sitting at home at night wondering if they dare put the fire on. We have left billions of tonnes of coal under our feet to lie dormant, while we are being held to ransom by gas and oil companies. We have to bring energy into this country from the most unstable places in the world.
	There has been a lot of talk in the past few years about carbon capture and storage. I had the pleasure of sitting in a Committee with the Minister and discussing how wonderful the green deal was going to be. That all led to nothing. The price freeze is welcome—it is a step in the right direction and people need it. What is also required is proper regulation by Ofgem, or whatever takes its place.

Debbie Abrahams: Does my hon. Friend agree with my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) that it is scandalous that Ofgem has not delivered on all the criteria it was meant to? That also fits into what my right hon. Friend the Member for Doncaster North (Edward Miliband) has pledged.

David Anderson: I find it scandalous, but not surprising. Ofgem was never capable of dealing with people who have spent lifetimes manipulating oil and energy markets throughout the world. Why should the world be any different from how it has been for a hundred years? That is one of the reasons why the people who came before us in this House had the sense to nationalise the energy utility sector. It could then be run in the interests of the people of this country, and not for the people who do not live in this country. All they want to do is siphon money off from the purses and wallets of the people we represent to fund their own profits. While I am not surprised, I am concerned.
	My party has a problem. I am clear that unless we have control this situation will go on and on. We might have a 20-month window when we freeze prices, which is welcome, but what happens after that? Will companies be able to put prices up? We have been told that the market will be reformed in a way that will stop them doing
	that. Well, I will believe that when it happens. This probably will not go down well with my hon. Friends on the Front Bench, but anybody who listened to “Question Time” last week—the real question time where sometimes people answer questions, not just deflect them—will know that when it was suggested that we nationalise these industries again there was a huge cheer from the people in the room. They realise that without proper ownership we will never control these people. The people who went before us knew what they were doing.
	We are coming up to the 25th anniversary of the privatisation of the utilities, and look what we are left with after 25 years of them having it all their own way. We have no security of supply and instead are relying on some of the most unstable countries in the world for our basic energy needs. We have not followed up on developing new technologies—where we once led the world—not just in coal, but in wind and wave and other things; on those things, we should be much further advanced than we are. We have a national grid that the people running it accept is not fit for purpose, and we have just stood back and let the companies get on with it. They have not upskilled the work force or trained it to meet the challenges of the future, because they have been too busy siphoning the money off into profits, and at the end of the day, the people carrying the can are the customers, our constituents.
	At the Labour party conference, our leader said repeatedly that this country deserved better. We do deserve better, and it is clear that only Labour will deliver it. I am probably wasting my time, given that the invisible men of the Liberal Democrats are not even here—and there are only four Members of the major governing party here—but unless we vote for the motion tonight, this will not happen before 2015, and unless the people of this country vote for us in 2015, it will not happen then either. Ours are serious solutions for serious times. So far, all we have heard from the so-called leader of this country have been attempts to deflect responsibility with jibes, cheap jokes and humour. This is no laughing matter. We need to realise that this is a matter of life and death for the people whom we represent. We realise that, and so do the parties on the Government Benches, but they will not face up to it.

Mark Lazarowicz: I am glad for the opportunity to make a few comments in this debate. As for all colleagues—at least on the Opposition Benches—who have spoken, the issue of rising energy prices comes up every week in my surgeries and public meetings. It is utterly complacent for the Secretary of State to lecture us about rising disposable incomes, as if that were the solution to the problem and energy prices did not really matter. He should try and tell that to people who, on top of rising energy prices, have been forced to accept a drop in hours, a wage freeze or rising housing costs, which is the reality for millions up and down this country.
	To date, the Government’s measures have not worked, as they have implicitly recognised, because if they were working, why would the Prime Minister have announced, on the hoof, his two major changes in energy prices? Last year, came the promise to put everyone on the cheapest tariff, which then became a promise to simplify tariffs, from which millions of energy customers will
	not benefit; then, this year, came the sudden review of green levies, which has now become simply the transfer of some energy efficiency measure into general taxation, or so it would appear.
	The Government’s policies have not worked to date because they rely on claimed features of the energy market that, by themselves, have not and cannot bring about the required level of market reform and apply downward pressure on energy prices. First, as my hon. Friends have said, the Government are relying on competition, but as even the Secretary of State would seem to accept, competition is not bringing down prices. After all, given that the prices charged by the major energy companies all seem to rise at roughly the same time and at roughly the same rate, we may be excused for being sceptical about competition. We now seem to be relying on switching, but after three and a half years in power, the Government have realised that it is not as easy to switch as they suggested, so they are going to introduce measures to make it easier.

Tom Clarke: I regret that I did not have time to refer to small businesses in my speech. Does my hon. Friend agree that small businesses do not welcome being asked to switch, in addition to all the other bureaucracy they have to deal with?

Mark Lazarowicz: That is a good point. One problem with relying on switching is that the Government’s measures do not tackle the problem of people switching and then finding it does not bring the expected advantages and so deciding to switch again. I have experience in my constituency of people who are tied into a year’s contract that they cannot get out of. Conservative Members gave the House examples of people making wonderful savings by switching, but I wonder whether those consumers will still find switching to be advantageous in a year’s time. I accept that switching is important, but it is ridiculous to suggest that it is a panacea, as the Government seem to be doing.
	The Government are also relying on simpler tariffs to solve the problems. Unfortunately, the simplification is proving to be of much less benefit than first promised. Many customers are now worse off because of the simplification measures. I have highlighted the impact of the way in which Ofgem encouraged a return to the use of a standing charge—in order, it said, to simplify the charging system. This has resulted in many customers with low energy usage, who are often on low incomes, facing sometimes substantial increases. To be fair to the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), he agreed to meet me when I raised this issue, and we were due to meet today. The meeting had to be postponed because of this debate, but I shall certainly press him on this issue in due course.
	The Government know that their policies are not making an impact on energy prices, and that is why the Secretary of State and the Government as a whole have been running round like headless chickens trying to come up with a response to the clear set of policies outlined by my right hon. Friend the Member for Doncaster North (Edward Miliband), the party leader, and by my right hon. Friend the Member for Don Valley (Caroline Flint) at the Dispatch Box today.
	The Government appear to be relying for a solution on the transfer of some of the cost of energy efficiency measures to general taxation, which will have some limited impact on energy bills. A move in that direction might have some theoretical merit, although we would all want to see how it would be worked out in practice and, above all, how it would be paid for. As my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) has just pointed out, however, none of these measures would have been put forward by the Government, were it not for the plans announced by Labour.
	The Government’s proposed measures will have only a limited impact. They, and the similar measures that the Scottish National party have proposed for Scotland if it were to be independent, also suffer from a big weakness—namely, that transferring the cost to general taxation would let the energy companies off the hook. That would lessen the pressure on them to keep prices down. It would also create the risk that the limited saving to customers would gradually be eaten up by price rises imposed by the companies to take up the slack—unless such measures were accompanied by Labour’s price freeze or a similar measure to prevent the companies from taking advantage of the price cut.
	Labour’s proposals for an energy price freeze are clear, coherent and comprehensive. They would make a real difference to consumers, households and businesses up and down the country, and that is why I support the motion. I hope that some Government Members will join us in the Lobby, but that seems unlikely, given that so many of them appear to regard this issue as so unimportant that they have not even taken part in the debate. Their constituents will certainly not hold them in high regard for being absent from a debate on such an important issue.

Ian Lavery: Thank you for calling me to speak in the debate, Mr Speaker. I have been in the Chamber most of the day, but I had to go to a debate on the draft deregulation Bill, which I see as a punishment. I apologise if I repeat points that have been made in my absence.
	This debate is really worth having. This is the most important issue in the lives of ordinary people up and down the country. It is great to see so many people supporting Labour’s proposal for a price freeze, because it means so much to them. It could make a difference of between £120 or £130 a year to families who are struggling to put bread on the table. Since 2010, the average household’s energy bill has increased by more than £300 a year. Energy companies have increased their profits on the back of spiralling energy bills for hard-pressed households. Energy prices have rocketed, and they are set to increase again in the near future. Only this week, Ofgem’s latest electricity and gas supply market indicators have shown that the typical domestic dual fuel bill stands at £1,420 a year, in stark contrast to the £1,105 at the time of the general election in May 2010.
	One of my great concerns in life is people living in poverty, including people who are in fuel poverty. Ministers have admitted that, despite a recalculation and reconfiguration of the how the fuel poverty figures are arrived at, the number of people in fuel poverty is expected to rise in the next two years. The recalculation was supposed to reduce the figures, but they will increase
	in any event. Figures from Ofgem this week show that the wholesale costs have increased by only 1.7% this year, while bills are up on average by more than 9%; and 60% of the levies, which the Government blame for putting up energy bills, were introduced by this Government.
	Ordinary people are entitled to know why these bills have been increased. People are at a loss to see why their bills are escalating. For the first time I can remember—as I look around, I see that I am one of the youngest, of course—people in this country cannot afford to buy energy. They simply do not have enough money to buy energy to keep themselves warm. Is that what we politicians want—giving people the choice between heating their homes or eating with their families? I am not being dramatic; it is a fact of life. If anybody has any doubts about that, they should come to me and I will introduce them to people who are heavily in debt and cannot manage their everyday costs.
	I am greatly concerned about the trading system and the cartels that have been described today. We met energy companies last week and tried to get some information from them, but it is very difficult to achieve that. The trading systems appear to be mysterious. How do these companies trade? People are not sure about that. How do these companies trade in the long term, and how do they trade in the short term? How do these big six companies trade at all? It is a real mystery. The Government need to find out more about it, and Ofgem needs to investigate it. Ofgem does not even ask the energy companies for their trading figures. That is illuminating, and there is no reason why that should not form part of the regulatory reform of energy companies’ responses to Ofgem. There is a real sense of financial jiggery-pokery. The mystery of the big six is seriously outflanking a Government who forget the misery of increasing numbers of people in fuel poverty yet support the monsters who create such despair. We really need to tackle this.
	When I came back into the Chamber, my hon. Friend the Member for Blaydon (Mr Anderson) was mentioning the various options and said that it looks as if this energy market is broken. How can we fix it? The energy companies are crying crocodile tears, claiming that they cannot make ends meet, while at the same time they are making fortunes. The boss of Centrica said only yesterday that profits of £2.7 billion were modest. That is a profit of £7.4 million a day or £86 a second. These chief executives and secretaries and senior managers are receiving massive bonuses too—bigger bonuses than premiership footballers. These wages structures makes premiership footballers look as if they are on workfare. We need to look at that.
	Let me end by saying something rather controversial. I really believe that the system is broken. If prices are being increased twice or thrice every year on a uniform basis by a cartel, and if all these people are saying that they cannot make ends meet while directors are making fortunes and shareholders billions, we need to look at that as well. Is it not time for us to break up the cartel? Is it not time for us to consider different options? Is it not time for us to do what was suggested by a member of the Energy and Climate Change Committee the other day—it was not a Labour Member—and consider adopting co-operatives such as those that operate in New York, and indeed elsewhere in America and in Canada, enabling the public to own part of the system?

David Anderson: My hon. Friend is, as always, making an excellent speech. I am pleased that he has mentioned America, because the American Government’s Energy Information Administration has said not just that the cost of natural gas to manufacturers fell by 36% between 2006 and 2010, but that at the same time the total cost of energy fell by 11%. Can my hon. Friend remember whether we in this country saw a 36% or even an 11% drop in bills during those four years?

Ian Lavery: That is the very point that I want to make.
	I said that I was going to be slightly controversial. If the directors are creaming off billions, the shareholders are making millions, and the only people who are suffering are the consumers, who, for the first time in my lifetime, cannot afford to pay for electricity or gas, the system is broken. If we do not change that system, it will be in a really dangerous state.
	I am going to say what some people are dreading hearing me say. There should be a serious investigation to establish whether the entire electricity system and the big six should be returned to some form of public ownership. That would enable us to control what we owned as a Government, and, most important, we would be able to ensure—because the Minister would ensure—that ordinary people, particularly the most vulnerable members of society, would not be cold in winter. We would prevent 24,000 or 25,000 deaths. It is a dodgy subject, and people are frightened of it, but we cannot control what we do not own, and we are not controlling the energy companies.

Caroline Lucas: I am very pleased finally to have an opportunity to contribute to this important debate, because it concerns a crucial issue that is raised with me time and again by my constituents. We should bear in mind that, as many other Members have said today, behind all the statistics that often dominate debates such as this are real people and real suffering. We are talking about people who wake up with ice on the inside of their windows, and about people who huddle in a single room because that is the only room that they can afford to heat.
	More than 1.5 million children in he United Kingdom are growing up in cold homes. Each winter, four times as many people are killed by fuel poverty as are killed on Britain’s roads, and fuel poverty-related illnesses cost the national health service more than £1 billion every year. I think that, given that background, few would deny that we have an energy bill crisis. In the context of the Fuel Poverty Advisory Group’s warning that fuel poverty affects 6 million households, the profits of the big six are deeply offensive. Between 2008 and 2010, their profits doubled to £4.6 billion. Last year, Centrica alone made profits of £1.3 billion, no doubt benefiting in a range of ways from the secondments of its employees to the Department of Energy and Climate Change and from its boss Sam Laidlaw’s influence as a former member of the Prime Minister’s business advisory group. That is just one example of the revolving door between the big fossil fuel companies and Whitehall, which was similarly well oiled under the last Government.
	A temporary bill freeze would be a welcome respite from price hikes which, as the Committee on Climate
	Change has reminded us, are mainly due to increases in the price of gas. I called for a price cap, along with a windfall tax on big six profits and a public inquiry, almost two years ago, on one occasion during a Westminster Hall debate in February 2012, and many Labour Back Benchers signed my early-day motion on the subject. I support the relief that a temporary price freeze would bring, so I shall vote in favour of the motion, but we also need a much more ambitious, far-reaching and coherent response. I hope that today the Opposition parties will be able to unite behind calls for a radical reform of the energy market as well, because I believe that that is the only way—and a permanent way—in which to tackle high energy bills, and I hope that they will get behind effective measures to break the stranglehold of the big six.
	As Fuel Poverty Action says:
	“Freezing prices at their current level won’t help the thousands of people who already die each winter due to fuel poverty: our bills are already at deadly highs”,
	so I want to set out five practical, positive and powerful policies to tackle fuel poverty this winter and for winters to come.
	First, the only permanent solution to the Energy Bill crisis is to make all our homes much more energy-efficient, so I am disappointed that there is no mention of energy-efficiency in the motion, especially as the green deal barely scratches the surface. Under the energy company obligation, at current rates it would take about 32 years to insulate all fuel-poor homes. Insulation rates are plummeting when they should be rocketing, and energy-efficiency businesses, often SMEs, are struggling when they should be flourishing.
	That is why a huge coalition of organisations representing consumers, families, faith groups and others all back the Energy Bill revolution campaign. It calls for revenue from carbon taxes, which currently disappears into Treasury coffers, to be recycled into a nationwide programme to make all homes super energy-efficient, with full insulation, modern boilers and renewable energy such as domestic PV, solar hot water and biomass heating. That could bring nine out of 10 homes out of fuel poverty, lower people’s bills, deliver four times more carbon cuts than current schemes and create 200,000 jobs. I again ask both the Government and the official Opposition why they will not support it.
	Mandatory efficiency standards are crucial, too. Some 70% of Britain’s fuel-poor live in properties with bottom of the barrel energy-efficiency ratings of E, F or G. A genuine fuel-poverty strategy must, at the very least, commit to lifting all these properties to band D standards by 2020 and raising the rest of our housing stock to today’s new-build standards by 2030.
	Secondly, we need ambitious fuel poverty eradication targets. I want to highlight a coalition amendment that was sneaked in during the Lords Committee stage of the Energy Bill. Astonishingly, Ministers are trying remove the statutory duty on Government to eradicate fuel poverty. They are replacing it with a vague provision to do something at some point merely to address the situation of those in fuel poverty, and all in secondary legislation, thereby reducing accountability and scrutiny. As the fuel-poor prepare for the onslaught of the cold and avoidable winter deaths, I trust the Minister and the
	Opposition will rethink their position and give strong cross-party support to the fuel-poverty amendment tabled by Lord O’Neill of Clackmannan when the Bill returns to this House.
	The Committee on Climate Change has confirmed that by far the greatest contributory factor to higher energy bills has been the rising price of gas. That makes the Government’s dash for gas deeply irresponsible. It will increase our dependence on gas with higher energy bills, as well as fatally undermine our hopes of tackling climate change. That is the third area where we need urgent action. This also makes Labour’s position of conditional support for shale gas inconsistent with its enthusiasm for a 2030 decarbonisation target and its rhetoric on affordable energy.
	There is an alternative to gas. Renewable energy can go hand in hand with affordable energy and can help cut our exposure to high and volatile fossil-fuel prices. While fossil fuels are on an upward cost trajectory, renewable technologies have seen dramatic price falls in the past few years. So if we are serious about creating an affordable energy system, we should be going all out for renewables and energy-efficiency.
	Fourthly, we should be doing much more to end the big six’s control over power generation and supply, not regulating them better, not just erecting a paper wall between their generation and supply businesses, not just requiring them to sell their power through a different structure. If we are serious about diversity in the energy market and cutting costs by allowing renewables to push down wholesale peak prices of power, we need to ensure renewables are given priority access to the grid.
	We have an opportunity to create a radically different energy system, where co-operative and community and independently-owned local renewable energy schemes flourish. In those circumstances, local people benefit from the energy created. The Belgian co-operative Ecopower provides energy for over 30,000 members. Denmark guarantees that 20% of all energy projects are open for community financing. In Germany over half of all the installed renewable energy capacity is owned by private citizens and co-operatives. That is the sort of transformative scale of community power we should be aiming for here, too. It is where the greatest wins for households and business energy bills can be secured. Projects such as the Brighton Energy Co-operative in my constituency provide a glimpse of an incredibly positive alternative energy future where people are active producers rather than just passive consumers.
	Community energy should be central to the debate about energy bills. Words alone will not deliver, however; we need policies and action. For every community to generate its own electricity, we need a regulatory framework that allows communities to buy the electricity they generate at wholesale costs, freeing them from the rip-off retail market.

Michael Weir: I am very interested in what the hon. Lady is saying. Does she agree that the Government’s obsession with nuclear—in particular, the strike price agreed for Hinkley Point—shows that they are going totally in a different direction?

Caroline Lucas: I thank the hon. Gentleman for his intervention, because it makes exactly the point that I want to move on to. For as long as both the Opposition and the Government are committed to these huge subsidies
	that are going to be behind nuclear power, their outrage at energy bills sounds a bit thin—it beggars belief. The size of the subsidies that will go to nuclear power will lock us into extremely long periods of paying over the odds to companies such as EDF. The rate of return on investment reportedly given to EDF is a whopping 10%—that is 10% profits, guaranteed for decades, going from our constituents to EDF, one of the big six. Why is it acceptable for UK bill payers to be fleeced in order to provide a rate of return to EDF that is double that which Ministers have said they see as fit for renewable projects—schemes that could be owned by communities themselves? Let us not forget that Hinkley Point C will not boil a kettle until the early 2020s, at best, by which time many renewable energy technologies will be a much better deal when it comes to keeping energy costs down.

Michael Weir: Hinkley Point C will start boiling a kettle on that date only if it is built on time, and no nuclear reactor has yet been built on time or on budget.

Caroline Lucas: I thank the hon. Gentleman, who must have been looking over my shoulder, because these are exactly the points that I would make. When we compare nuclear with renewables, we see that in some cases renewables are already cheaper. They are also asking for a strike price of £91 by 2018, which is substantially less than what we are going to be giving to nuclear.
	Consumer Futures said that the Hinkley deal
	“moves the risks of future variations in wholesale prices from investors onto consumers, will likely see household bills increase and will distort future investment in electricity generation.
	Consumers will again feel that the energy market is stacked against them.”
	I just cannot understand why there is not greater outrage at the way in which we are allowing ourselves to be locked into these long contracts with EDF, paying over and above market prices for decades to come. I repeat that it is hard to take seriously the crocodile tears we are seeing from hon. Members on both sides of the House while we are suggesting paying hand over fist to the nuclear companies, which will be laughing all the way to the bank.
	In conclusion, I welcome the greater focus on the problem of high energy bills that we have seen in recent months. It is a massive issue in all our constituencies; people come to us on a daily basis worried about how they are going to be able to survive the winter. It is a matter of life and death, not just of discomfort; we are talking about people who are going to be suffering from radically ill health and about the premature deaths associated with fuel poverty. So I welcome this debate, but I regret that most of the solutions put forward do not fully address the root causes of fuel poverty and high energy costs. A fundamental shift should be at the heart of energy market reform. I am worried that we have heard much more about tinkering around the edges of a system that keeps the big six in power and far too many people in fuel poverty, rather than about much more radical energy transformation, which we are beginning to see in other countries. There is a precedent and we could be following it here—if the political will existed.

Dawn Primarolo: I call Christopher Pincher. [Hon. Members: “Hear, hear.”]

Christopher Pincher: I thank you, Madam Deputy Speaker, and my legion of fans. I apologise for not being here for the opening exchanges of this important debate, but I had to attend a funeral. I congratulate the Opposition on tabling this motion but, in as much as we are discussing long-term structural energy issues, as much as it is a challenge to the Government, it is also an admission by the Opposition of their failure during their 13 years in government, when they had the time, the money and the majorities to make changes but did not do so.
	The shadow Secretary of State said, with characteristic chutzpah, that we need to develop more home-grown energy. Of course, she is right, but the question then must be: why during 13 years of Labour Government was no new nuclear power station opened? The last to open was in 1995 and the next will be opened under a Conservative-led Government in the future. Labour also had no keenness to explore shale gas. These things the Labour Government failed to do. Labour Members have said that we need greater competition in the energy market—

Alan Whitehead: rose—

Christopher Pincher: I will not give way, because I am on borrowed time—[Interruption.] In a parliamentary sense. In addition, both the Opposition spokesman and the and Treasury Bench spokesman need to speak.
	The Opposition have said that we need greater competition in the energy market. They are right, but the energy market as it stands—the big six—is Labour’s creation. The right hon. Member for Oldham West and Royton (Mr Meacher) called it an oligopoly, but it is Labour’s oligopoly and the Opposition must take some responsibility for that, as the hon. Member for Blaydon (Mr Anderson), who is now shaking his head, said in his speech.
	The Opposition have now suggested that we should fix prices under a price freeze for a period of time so that we can right the market. If something looks too good to be true, sounds too good to be true and smells too good to be true, most right-thinking people would say that it is too good to be true. A price fix is too good to be true.
	Fixing prices, as many experts have said, will only mean that the energy companies will hike their prices in anticipation of that fix. That means that people will be paying artificially high prices, particularly if the wholesale price falls during the period of the freeze. It is not just me who is saying that; Professor Dieter Helm is saying it, too.
	The Opposition also say that we need to get more competition into the energy market, but if we listen to Steve Fitzgerald, the darling of the Select Committee who ran rings around some of the players from the big six at that meeting, or to First Utility, the Leader of the Opposition’s provider of choice, we hear them say that a fix will make it more difficult to operate in the market. It will not allow small players in and will entrench the position of Labour’s big six. The Labour party ought to admit that.
	The Opposition also say that investment will flow into our infrastructure anyway. I do not believe that is true. We need to spend at least £110 billion in the next
	10 years on our power stations, our pipes and our pylons to keep the lights switched on and we need much of that investment to come from private companies. The hon. Member for Southampton, Test (Dr Whitehead), who made a thoughtful speech and is my colleague on the Energy and Climate Change Committee, said that he does not believe that the energy companies will invest that sort of money. We learned in the Select Committee inquiry just a week ago that E.ON alone has invested £7 billion in its generating capacity over the past five years. If we extrapolate that over the big six, that would suggest that they are spending some £40 billion on the infrastructure we so desperately need.
	If the investment dries up because of a price freeze and that sends the wrong message to the markets, the poor old taxpayer—the van driver, the nurse, the doctor, the teacher and the pensioner—will have to pick up the tab. That is why I think the Opposition’s proposal is a con. It is a scam. It is a swizz. It is voodoo economics. It is political charlatanism. They know it and the electorate can see it, too. What we need is not some artificially high price freeze in the future but price cuts now. That is what our electorate want and what our constituents tell us. If we roll back some of the green levies that account for some £112 on the average dual fuel bill, if we make it easier to switch, saving people some £200, and if we get people on to the lowest tariffs, saving them about £158, we can reduce bills now for hard-pressed consumers. That is the way to deal with our energy challenge.
	The proposals made by those on the Labour Front Bench might look good and might sound good on television, but we and our voters know that they are not going to wash.

Tom Greatrex: We have had a good and interesting debate this afternoon, with many speeches from right hon. and hon. Members, particularly those on the Labour Benches, that have highlighted the importance of rising energy prices to many hard-pressed families and struggling businesses.
	Let me address the thrust of the lengthy and at times tortured speech made by the Secretary of State. It is a shame that he is no longer in his place, but he explained that he would have to leave and I am sure that the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) will report back to the Secretary of State the comments made this afternoon. The Secretary of State started by mentioning consensus on the Energy Bill. As the Minister knows—and as his colleague, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), who is now in his place, will recall from his involvement in the final stages of the Energy Bill, after his two predecessors started the process—we scrutinised the Bill and, on balance, supported many of the measures contained in it. However, on Second Reading—the Minister, the right hon. Member for Bexhill and Battle, can check Hansard and pass this on to the Secretary of State; we said it then and again afterwards—my right hon. Friend the Member for Don Valley (Caroline Flint) warned that the Energy Bill
	“fails to include direct measures to increase transparency, competition or liquidity or ensure that the energy market is properly regulated and works in the interests of consumers.”—[Official Report, 19 December 2012; Vol. 555, c. 906.]
	Both my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who spoke in the debate, and I have said that many, many times, and I am sure that the Minister heard it, as did other members of the Energy Bill Committee. This is not new: we have been saying this, and raising aspects of the problem, for at least a year, and raising some aspects for nearly two years. The Secretary of State said that he wanted consensus back. We have consensus on some of the measures in the Energy Bill, but we said at the outset that there were things missing from the Bill. That is what our policies aim to rectify, and if Ministers could get over themselves a little bit they could introduce those reforms, and consumers and other people would be in a much better position.
	The hon. Member for Wealden (Charles Hendry), one of the Minister’s predecessors, discussed long-term signals and the importance of securing investment in energy infrastructure. That was the focus of the process called electricity market reform, which became the Energy Bill. There is also an important point about consent. If we expect investment to happen, people who pay energy bills need to know that the market functions effectively and that they can trust their energy supplier. That necessitates changing the retail market to make it clear, fair and transparent.

Charles Hendry: In her speech, the right hon. Member for Don Valley (Caroline Flint) was asked two questions. First, she was asked whether she had heard from energy companies saying that they were more likely to invest as a result of Labour policies, but she did not answer. She was also asked if she had heard from anyone saying that they would be less likely to invest, and she would not answer that one. Can the hon. Gentleman answer on her behalf?

Tom Greatrex: I can tell the right hon. Gentleman—[Interruption.]Sorry, I can tell the hon. Gentleman—I am promoting him; that is the regard in which I hold him—that in the period immediately after the conference speech by the Leader of the Opposition and since I have had a number of discussions with energy companies, with big suppliers, with small suppliers, with people in the supply chain, and with a whole range of people across the sector, and they have made it clear that they want a situation in which they can be trusted. They want transparency in the market. Indeed, some of the small suppliers that have been prayed in aid in speeches by Government Members have said that the most important thing is to have an open and transparent system in the energy market, which is what our reform is about. Then we will be in a position where we can have a fair debate about these issues and ensure that investment can flow, because people can understand and trust the system that will be in place.

Gregory Barker: Will the hon. Gentleman give way?

Tom Greatrex: I will not, because I am short of time, and I need to be able to respond to comments from other hon. Members.
	My hon. Friend the Member for Glasgow Central (Anas Sarwar) highlighted a reluctance to address these issues and to challenge the fact that they exist in Edinburgh
	as much as in Whitehall. The hon. Member for Wealden referred to the rather ridiculous claims about blackouts, which were made immediately after the proposals were first outlined, and he will be interested to know that every single energy company that I have since spoken to has dissociated itself from those comments made by the trade body and, indeed, from the comments of the Secretary of State and the Minister on Twitter immediately afterwards. I am sure that he will heed the warning on Twitter that the Prime Minister issued some months ago.
	The problem also exists in Edinburgh, where the only person sticking with those comments and repeating the ridiculous comparison with California in 2000 is the Scottish National party energy spokesman in the Scottish Parliament. We will stand up to those issues, because we want a market that works. My hon. Friend and constituency neighbour, the Member for Lanark and Hamilton East (Mr Hood), made an important point about the duties of government and discussed the legacy of the former Prime Minister, Margaret Thatcher. Another aspect of her legacy, Sir John Major, said a couple of weeks ago that if markets did not work and companies behaved badly, Governments stepped in. That is precisely what we are outlining in the policies that we are debating.
	Another legacy of John Major was the system where the companies could integrate. Government Members referred to Labour’s big six. The Minister, the right hon. Member for Sevenoaks—I know that he was on a career break at the time, but he had been a Minister in John Major’s Government and has been around for a considerable time—will know that the first of those acquisitions was Scottish Power acquiring Manweb in 1995. The hon. Member for Warrington South (David Mowat), who is unable to be in his place, could not describe, when challenged, why prices have gone up. My hon. Friend the Member for Blaydon (Mr Anderson) made a related point. That is precisely why we need transparency in the market.
	When SSE put up its prices recently, it tried to quantify the cause of the increase. It attributed 4% to wholesale costs, 10% to network costs, 13% to Government policy costs, 8% to VAT, which adds up to 80%, leaving 20%. It said that an additional 20%, which was not in SSE’s press statement but in the small print and in conversations afterwards, was to increase its profit margin. That is what is happening in the market, and not just in the case of SSE—npower did something similar. I recommend that Members who want to see just how complicated and opaque the market is read the most recent edition of Private Eye, in the City column, about the structures around Centrica and particularly the trading arm of Centrica and the way in which profits are moved around different parts of what is essentially the same company.
	My hon. Friend the Member for Ynys Môn (Albert Owen), a distinguished member of the Select Committee, made the important point about ensuring that off-grid customers are protected. The hon. Member for Wells (Tessa Munt) repeated the comment from First Utility, but she neglected to mention that when interviewed on “You and Yours” a couple of weeks ago, Ian McCaig, the chief executive of First Utility, said that the most important reform needed was openness and transparency in the market. That is exactly the reform that we propose in the motion before the House.
	My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) has a distinguished record in the House of campaigning for the fuel poor, and indicated how long he has been campaigning. My hon. Friend the Member for Rochdale (Simon Danczuk), as well as mentioning some of the issues that he has encountered in dealing with energy companies, made the important point that the proposed measure would save small businesses £5,500 and medium-sized businesses £32,900 based on their previous bills.
	The hon. Member for Angus (Mr Weir) talked about the reviews. He will know that the one announced by the Government is the 18th review since 2001. He spoke about the measures announced at the Scottish National party conference for a separate Scotland to reduce bills by £70 by moving ECO from consumer bills on to the tax bill. He neglected to mention that the pooled support for renewable energy for Scotland, which is paid across the whole of Britain, would not exist in the same form. Scotland has 8% of the population and more than a third of that support, which is spread across all the bill payers in Britain, as he well knows.
	The hon. Member for Chippenham (Duncan Hames) asked me a number of questions, first about how the measures would be introduced and whether emergency legislation would be used. I am not sure whether he was present for the speech from my right hon. Friend the Member for Don Valley at the start of the debate. She made it clear that we would introduce specific legislation quickly—he might call it rapid or emergency legislation—to do one simple thing: to enable the Secretary of State for a fixed period to amend the licence conditions to allow the freeze to take place while we make the wider reforms.

Duncan Hames: rose—

Tom Greatrex: I shall respond to the other points that the hon. Gentleman made during the debate, and I am conscious of time. He referred to the issues for small companies. I say again that every small supplier that I have spoken to in the past few weeks has made it clear that what is needed most of all is an open, fair and transparent market where energy is traded openly and suppliers can compete and get a better share of that market in order to build their customer base. That is what Labour’s reforms would deliver. The price freeze would enable those reforms to be put in place.
	My hon. Friend the Member for Southampton, Test (Dr Whitehead) shot a number of ducks and set out cogently and coherently the point of resetting the market. With his expertise and as a member of the Select Committee and the Bill Committee, he will know that we have been talking about these issues for a considerable time, and to suggest that they are something new or emerging today, as the Secretary of State implied, is utter nonsense.
	My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) talked about the impact on health. My hon. Friend the Member for Chesterfield (Toby Perkins) referred to the Prime Minister’s announcement on green levies, which was made in front of the Environmental Audit Committee a couple of weeks ago—the Energy Minister is in his place. It stated that the Government were looking at each of those levies. I asked a parliamentary question on which levies they were looking at and received a response today from the Secretary of State. It stated that they are looking at
	investment incentives, but not for the renewables obligation, contracts for difference or feed-in tariffs. The Prime Minister said earlier today that they were looking at every subsidy and every levy. There is complete confusion at the heart of the Government about what is and is not in scope for the review. If they are concerned about the impact on confidence and investment, they need to look at the shambles of their own policy over the past couple of weeks.
	My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) made a heartfelt speech detailing her own experience of growing up in fuel poverty and her concerns about her constituents and others in the same situation. My hon. Friend the Member for Blaydon (Mr Anderson) made a similar case. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) also dealt with the reality of the cost of living crisis, of which energy costs are just one aspect. My hon. Friend the Member for Wansbeck (Ian Lavery) talked about the issues facing ordinary people. All those contributions made it clear why we need complete change in the market, and we need a price freeze to enable that change.
	The motion before us is about a price freeze, but it is also about ensuring that there is a level playing field for other companies and that companies cannot abuse their position in future. It is about fixing a broken market and standing up for consumers and businesses. It is about making the market fair, clear and transparent in the interests of consumers, industry and the country. I commend the motion to the House.

Gregory Barker: We have indeed had a good and lengthy debate. We on the Government Benches relish the opportunity to debate with the Opposition our wide-ranging actions to help with the cost of living and our ambitious plans to get a better deal for energy consumers and to secure our energy future.
	We heard contributions from the hon. Member for Glasgow Central (Anas Sarwar), my hon. Friend the Member for Wealden (Charles Hendry), the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), my hon. Friend the Member for Stroud (Neil Carmichael), the hon. Members for Oldham East and Saddleworth (Debbie Abrahams), for Chesterfield (Toby Perkins) and for Angus (Mr Weir), my hon. Friend the Member for Chippenham (Duncan Hames), the hon. Member for Rochdale (Simon Danczuk), my hon. Friend the Member for Morecambe and Lunesdale (David Morris), the hon. Member for Ynys Môn (Albert Owen), my hon. Friend the Member for Wells (Tessa Munt), the hon. Member for Lanark and Hamilton East (Mr Hood), my hon. Friend the Member for Warrington South (David Mowat) and the hon. Members for Brighton, Pavilion (Caroline Lucas), for Wansbeck (Ian Lavery), for Edinburgh North and Leith (Mark Lazarowicz), for Washington and Sunderland West (Mrs Hodgson) and for Liverpool, Wavertree (Luciana Berger), the right hon. Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Blaydon (Mr Anderson). We heard excellent interventions from my hon. Friends the Members for Ipswich (Ben Gummer),
	for Gillingham and Rainham (Rehman Chishti) and for Selby and Ainsty (Nigel Adams). I apologise if I do not have time to mention all the contributions.
	We can sum up our mission: cheaper energy and cheaper bills. The coalition is fairly and squarely on the side of the consumer. Unlike the Labour party, we are not trying to kid the public that there is a simple, silver-bullet solution. Unlike the inertia and complacency that were that hallmark of 13 wasted years, our approach to energy is ambitious, radical, urgent, practical and, most of all, honest. We are delivering. There has been £35 billion of new investment in power generation in the past three years. The coalition is building for the future. [Interruption.] We know that the greatest help of all for consumers is to roll out ambitious energy efficiency retrofits. That is the long-term solution—something that was completely missing from the Opposition’s motion. [Interruption.] It is really interesting that they did not mention that at all. [Hon. Members: “Give way!”] We know that Labour wants to knock the green deal, run down the energy company obligation and go back to old-style—

Dawn Primarolo: Order. That is enough. Members will listen to the Minister just as they listened to every other speaker. He will decide when he wants to give way.

Gregory Barker: Thank you, Madam Deputy Speaker. The fact is that Opposition Members make a lot of noise because they abhor the market, consumer choice and the fantastic SMEs that are rising to the challenge. Labour wants to go back to expensive state monopolies, close the door on innovation and close the door on SMEs, and hand it all to the big six on a plate.
	Sadly, as has been demonstrated in spades in the Chamber today, Labour Members, while tapping into the genuine public concern about the cost of living—a concern we all share right across this House—have responded to that concern with political trickery, cheap soundbites, and policy that, sadly, is just a con: a price freeze con. It was very telling that despite repeated questioning neither the shadow Secretary of State nor the shadow Minister could name a single independent energy supplier that supported their price freeze con—not a single one. As Member after Member has pointed out, not only do Labour Members know they cannot guarantee to deliver such a freeze, but the long-term net impact of trying to rig the market with clumsy, 1970s-style state intervention would be to hurt—

Huw Irranca-Davies: rose—

Gregory Barker: The hon. Gentleman did not actually speak in the debate.
	The net impact would be to hurt the fuel-poor, to hit hard-working people, and to clobber families and pensioners on tight budgets. We are not in this for 20 months; we are in it for the long term. For the first time in 13 years, we have a Government who are planning and taking decisions in the long-term interests of British consumers.

Duncan Hames: rose—

Gregory Barker: I give way to my hon. Friend, who made an excellent speech.

Duncan Hames: We have heard from the Opposition that they believe that legislation would be necessary to introduce this price freeze. Even if this Government were to table such legislation tomorrow, what would stop energy companies hiking their prices before it became law?

Gregory Barker: They have hiked them before and they could hike them afterwards.
	The long-term impact of the freeze would be to decimate investment and to drive away consumers. The very-long-term secure energy supply we are trying to build would vanish at a stroke, and the poorest and the most vulnerable would pick up the price tag. We know that Labour Members cannot freeze prices—it is a con to suggest that they can—but, as we heard again and again today, they would succeed in freezing out competition, choice and investment.

Huw Irranca-Davies: Will the Minister give way?

Gregory Barker: No, I will not.
	For 13 years, Labour Members presided over the energy sector. For 13 years, they dithered and delayed over crucial investment. In the previous Parliament, fuel poverty rose every single year—something we did not hear from the Opposition Benches. For 13 years, they presided over unprecedented corporate consolidation, creating the real lasting Labour legacy—the big six. It is a cheek for Labour Members to say that we are the friends of the big six when in fact they picked their ministerial team from the big six. Is it not a fact that the leader of the Labour Front-Bench team in the House of Lords is the former head of Government affairs at SSE—its top lobbyist? Labour Members are not just friends of the big six and they did not just create the big six—they recruited their team from the big six, so we will hear no more from them on that.
	For 13 years, Labour Members let real competition wither while consumers were bombarded with a blizzard of tariffs that, under their watch, grew to over 400. For 13 years, they failed to simplify bills and increase transparency. For 13 years, they failed to build the foundations of a safe, clean energy future. For 13 years, they failed to build a single nuclear power station or get an agreement to do so. For 13 years, they saw Britain languish at the bottom of the European league table for deployed renewable energy. Labour Members stood by and watched British energy go bust. Now they want another go, but we have not finished undoing the damage they did last time.

Albert Owen: The Minister mentioned tariffs. The Prime Minister has promised this House and the country that people will be put on the lowest tariff. Will the Minister now tell the House, at this late stage, how much less they will pay for their bills under that policy—or will they go up? Which one will it be?

Gregory Barker: It will be different for different people, but from December people will get a much better deal because the Government are putting them on to the cheapest tariff—something the Labour party did not do in its 13 years in government.
	We continue to undo the damage that Labour did to consumers’ bills. We have taken Labour’s renewable heat incentive off energy bills, saving consumers £179.
	The right hon. Member for Don Valley (Caroline Flint) said in our last debate or at questions that £100 was not very much. I have to tell her that Government Members know that, for a lot of families, £100 is a great deal: that £179 on people’s bills was not welcome.

Caroline Flint: Did I not make the point that the way in which the Government have used green levies misses the point? The point is that wholesale prices have been flat, but the energy companies have marked up their prices and charged us more in our bills. That is what the Government should be addressing, rather than playing around and blaming green levies.

Gregory Barker: If that is the point that the right hon. Lady was trying to make, I accept that, but what Government Members heard was her dismissing £100 as not a great deal of money. We know that for hard-working people it is a great deal of money.
	That is why we acted quickly to slash the over-generous subsidies that we inherited from the Labour party for solar and other technologies. The Labour party opposed those cuts. While we have been standing up for consumers, Labour has been sitting down with vested interests.
	This debate has been dominated by the systematic demolition of Labour’s price freeze con. However, the most effective critique comes not from MPs, but from the smaller, independent generators that are keen to break into the market dominated by the big six and created by Labour. It is those new entrants that can provide real consumer choice again. They are entrepreneurs who want to compete for the business of our constituents with better prices, better offers and better service.

Ian Swales: Does the Minister think that the Opposition’s policy will make it more or less likely that the three independent power producers who want to build power stations in my constituency will invest?

Gregory Barker: The political risk and regulatory uncertainty that the Labour party is introducing into the energy sector is already raising the cost of capital. God forbid it was to form a Government—that would be a hammer blow to investment in the energy sector, a hammer blow to jobs and a hammer blow to consumer prices. It would spell long-term decline for the energy sector.
	Labour’s lurch back to the 1970s would entrench the big six. Our vision for the UK energy market is one of fierce competition, dynamic new entrants and a far more decentralised, innovation-rich economy. Thanks to exciting new technologies, commercial, industrial, public sector, community and home generation are taking off all over the country. Although I disagree with many of the points made by the hon. Member for Brighton, Pavilion, I share her enthusiasm for community energy, which is really growing legs under this Government.

Jimmy Hood: The Secretary of State has 7,727 constituents who are over 75. The Minister has 14,080 constituents who are over 75. Can he tell us how many of them have switched?

Gregory Barker: No, I cannot off the top of my head. Can the hon. Gentleman name a single independent generator that supports Labour’s big freeze? Perhaps he
	will write to me with that information. I will write to him with the information that he has requested.
	I pay tribute to my hon. Friend the Member for Wealden (Charles Hendry), who made a heavy hitting and thoughtful speech. He pointed out that Labour’s plans are already undermining investment, forcing up costs and increasing the political risks. He has estimated that the cost of Labour’s price freeze to consumers’ bills will be £1 billion.

Christopher Pincher: We have just heard an exchange about tariffs. Is the Minister aware that under Labour there were more than 4,000 tariffs on offer? Is it any wonder that people did not switch when they had no idea which tariff to switch to?

Gregory Barker: There was no real consumer choice under Labour, but we are getting it right and delivering for British consumers.

Rosie Winterton: claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.
	Question agreed to.
	Main Question accordingly put.
	The House divided:
	Ayes 237, Noes 295.

Question accordingly negatived.

Business of the House

Motion made, and Question put forthwith (Standing Orders Nos. 15 and 41A),
	That at this day’s sitting, the Motion relating to Explanatory Statements on Amendments to Bills may be proceeded with, though opposed, until any hour.—(Mr Evennett.)
	Question agreed to.

gambling (licensing and advertising) Bill (Programme) (No.2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),
	That the Order of 5 November 2013 (Gambling (Licensing and Advertising) Bill (Programme)) be varied as follows:
	(1) Paragraphs (2) and (3) of the Order shall be omitted.
	(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 19 November 2013.
	(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.—(Mr Evennett.)
	Question agreed to.

Amendments to Bills (Explanatory Statements)

Lindsay Hoyle: I inform the House that Mr Speaker has selected the amendment in the name of Caroline Lucas.

Charles Walker: I beg to move,
	That this House approves the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979, noting that the Public Bill Office will assist Members as required in the preparation of such statements.
	The motion stands in my name and that of my right hon. Friends the Leader of the House of Commons and the Deputy Leader of the House of Commons, my right hon. Friend the Member for Carshalton and Wallington (Tom Brake), the shadow Leader of the House, the hon. Member for Wallasey (Ms Eagle), the shadow Deputy Leader of the House, the hon. Member for Dunfermline and West Fife (Thomas Docherty) and my predecessor as Chair of the Procedure Committee, my right hon. Friend the Member for East Yorkshire (Sir Greg Knight).
	I note that I may detain the House into the small hours of tomorrow morning if I so wish. That is a tempting proposition, as I have lots of scores to settle with many colleagues. However, as I quite like getting elected to things I will not, on this occasion, detain the House for long and will make a very short speech. I hope that colleagues will make very short speeches too, and that we can wend our way into the night for an evening of fun, frolicking and frivolity.
	The report “Explanatory statements on amendments” is a serious piece of work undertaken, in the main, by my predecessor, and I was lucky enough to inherit it in October last year. The Committee is saying that explanatory statements to amendments are an extremely good thing: they allow for informed debate, and for people to have an understanding of what those tabling amendments are trying to achieve. We have, however, taken a permissive, rather than a prescriptive, view. We believe that the Government, if given the opportunity to do so, will want to do the right thing, and that the right thing is to put forward explanatory statements to amendments. I look at the Chief Whip and the Deputy Leader of the House and see two people totally committed to doing the right thing. They have done the right thing throughout their parliamentary careers—one of those careers has lasted for more than 40 years—and I am certain that that will continue to be the case for what remains of their illustrious parliamentary careers. I note that the Chief Whip is not smiling too much, so I will move on.

Greg Knight: Does my hon. Friend agree that when considering changes to our procedures we should never do anything that might discourage scrutiny? Does he share my concerns that the amendment to the motion, if passed, could act as a deterrent to some amendments being tabled?

Charles Walker: One reason for not taking a prescriptive approach is that a disorderly explanatory statement attached to a reasonable amendment—perhaps one tabled in a short amount of time—might lead to it not getting on to the Order Paper, thus restricting debate.
	To return to my central point, I believe that Members of Parliament, the Government and the Opposition should want to do the right thing, and I am hopeful that they will do the right thing. If they do not do the right thing, it would be reasonable for the House and the Procedure Committee to revisit the issue in the not-too-distant future.

Caroline Lucas: I am disappointed by the weakness of the hon. Gentleman’s argument so far. I hope it is going to get a bit better. How can explaining one’s amendment possibly be a deterrent to debate? His confidence in his colleagues’ willingness to do the right thing is somewhat undermined by the fact that they did not do that when there was a pilot. If, as he says, he wants people to do this, why does he not make it mandatory, rather than just hoping they will do it despite evidence that they will not?

Charles Walker: I think the hon. Lady has indicated that it was not the case that the Government tabled amendments in the pilot, but at the Committee stage of the Small Charitable Donations Bill 42 amendments were tabled by Back Benchers, the Government and the Opposition, and 40 of them had explanatory statements. On Report, all 37 amendments had explanatory statements. If I am misreading that, I apologise.
	I have more faith in this place than the hon. Lady. I have faith in my colleagues and believe that, given the opportunity to do the right thing, they will do the right thing. The fantastic thing about the Procedure Committee and about bringing reports to the Floor of the House is that it is open to the House to amend them. This is a vehicle for change. I note that she and colleagues have tabled an amendment, and it will be for the House to decide the way forward, not me, as Chairman of the Committee, or its other members. I will not detain the House much longer. I am sorry that the Committee’s report comes as such a disappointment to a number of colleagues, but I repeat that it is within their gift to amend it, and I hope that they do.
	In conclusion, I would simply add that a team of Clerks are champing at the bit to help Back-Bench colleagues attach explanatory statements to their amendments. They are ready, waiting and willing to do these things. I also hope that there is an army of Whitehall civil servants wanting to seize the day and impress their Ministers with their diligence and brilliance. I look, too, at the Opposition, in all their glory, and know that, despite our living in straitened times with limited resources, they will turn to their researchers and their special advisers—they are not really special advisers, but that is what they are called—and will demand that they step up to the plate and provide explanatory statements. I appreciate that it will not be possible on all occasions, but let us make this a new beginning for the way we conduct business in this place. If the House does not take this opportunity, however, the Committee will revisit the matter and bring forward more prescriptive recommendations.

Caroline Lucas: I beg to move, amendment (a), leave out from “House” to noting and insert
	‘notes the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979; and resolves
	that explanatory statements on amendments be mandatory, subject to guidelines to be issued under the authority of the Chair’.
	Today, we have the opportunity significantly to increase transparency and transfer just a little bit of power from the Whips to Back-Bench MPs. When I first arrived here, I was immediately struck by how difficult it was to work out what all the amendments tabled on the Floor of the House actually sought to do; and I did not seem to be alone, so I joined with others who also wanted a brief explanation of amendments so that everyone could know what they sought to achieve. At the moment, as we run from another meeting, we look to see what we are voting on and find something like: “Clause 1, page 1, line 5, leave out subsection (1)”. So then we need to consult several dense documents to work out what that and many other multiple amendments actually mean.
	It is quite right, of course, that MPs should, as much as possible, listen and contribute to debates in the main Chamber, follow all those debates and then be enlightened on the effects of every single amendment, but as hon. Members know, being an effective MP involves many other tasks, including responsibilities to undertake work in Committees, to attend Westminster Hall debates and to chair and attend meetings. As a result, colleagues frequently cannot sit in the Chamber all the time a debate is going on. There are many talented Back Benchers in this place who want to scrutinise, and they should not be treated as Lobby fodder.

Thomas Docherty: We have checked with the Vote Office and our e-mails and we cannot find an explanatory statement for the hon. Lady’s amendment. Given that she did not table one with the Vote Office or circulate one to colleagues, surely she is defeating her own argument.

Caroline Lucas: I am glad the hon. Gentleman raises that matter, because I actually sought some advice on it. We were allowed to table explanatory statements during the pilot, but as I understood it, we were not allowed to do it now, otherwise I would have done it, precisely to make that point.

Thomas Docherty: But the hon. Lady could have circulated one to colleagues. There was nothing to prevent her from using the e-mail system—the green way of doing it—to send an explanatory statement to all 650 colleagues. Why did she not do that?

Caroline Lucas: I want to make it mandatory for everybody. It is very nice to do it voluntarily, as we would have done had we been allowed, but we were not. [Interruption.] Instead of smirking in that rather irritating fashion, the hon. Gentleman should focus on the debate in hand.
	I was making the point that MPs should not be treated as Lobby fodder. After two pilot schemes, everyone seems now to agree that 50-word explanations are a good thing, so the motion from the Procedure Committee to make possible explanatory statements to amendments to be discussed on the Floor of the House is very welcome. I wish it was possible all the time; it is a pity that we have to get special permission even to make it possible. On those two pilots, it was possible.
	I also welcome statement in the Procedure Committee’s report that it wants the statements to
	“become an accepted norm of the legislative process.”
	If that is what the Committee wants, why not make the statements mandatory, rather than just talking about an aspiration or a wish? The hon. Member for Broxbourne (Mr Walker) rightly said that the Government did indeed issue explanatory statements on that occasion, and that the Opposition did not do so. It is not beyond the bounds of possibility that, one day, the Government will become the Opposition and find it less convenient to produce them in future. If we want it to become as natural to issue an explanatory statement as it is to sign an amendment, we have the opportunity tonight to make them mandatory.
	A cross-party group of us, including senior colleagues, who are working on parliamentary reform have tabled amendment (a) because we would like the explanatory statements to be mandatory, to ensure that the Procedure Committee’s wish for the statements to become the norm becomes a reality. To clarify, in calling for the statements to be mandatory, we envisage guidelines to include dispensing for the need for them in relation to self-explanatory or consequential amendments. Actually, that is a good reason for not having circulated an explanatory statement on amendment (a), as the hon. Member for Dunfermline and West Fife (Thomas Docherty) was tempting me to do: it is surely, even to him, self-explanatory.
	Unless we have a mandatory scheme, as amendment (a) proposes, there is a danger that the statements would not become part of the culture of this place, and that they would be submitted only when it suited Members to do so. As we all know, the Executive do not behave within the spirit of the legislative system at all times, and we need a system that will ensure that, when they are substantially amending their own legislation—on Report, for example—they have to explain why.
	The recent pilot taught us that the Whips pick and choose. The official Opposition did not bother to submit statements on the first Bill, the Electoral Registration and Administration Bill, which was a great shame. However, they appeared to have a change of heart, and were prepared to submit them on the relatively uncontentious Small Charitable Donations Bill. I do not accept that they did not participate on the first Bill because of a lack of resources. Sometimes it is more convenient not to explain, and frankly that is not good enough. That is why we need the statements to be mandatory.

Wayne David: I thank the hon. Lady for giving way, and I will try not to smirk. Does she not accept the valid point that the Opposition party and, particularly, Back Benchers do not have sufficient resources to submit explanatory statements as well as putting in the time and effort required to table the amendments themselves, especially on an extremely detailed and complex Bill?

Caroline Lucas: No, I do not accept that point. If the hon. Gentleman has thought enough about an amendment to table it, he must have thought about what he is trying to achieve with it. If he cannot summarise that in 50 words, why is he tabling the amendment in the first place? He could also call on the Public Bill Office to help him with the statements.

Wayne David: I want to ask the hon. Lady a simple question. Has she heard of probing amendments? If she has, she will know full well that their purpose is to elicit information and commitments from the Government, and not necessarily to declare a position.

Caroline Lucas: I think that the hon. Gentleman misunderstands the point of the explanatory statements. They would simply make the aim of an amendment clear. If that aim is to seek information from the Government, that could be made perfectly clear.
	I should like to move on to costs and resources. Hon. Members will have noticed that the Procedure Committee did not recommend a mandatory approach partly because it thought that that could take up time and resources, and that it could therefore restrict the ability of the Opposition and Back-Bench Members to table amendments. It feared that that could be damaging to the House’s ability to scrutinise legislation. I believe that there is a strong case to be made that the opposite is true, and that mandatory statements would save time and improve scrutiny.
	The evidence from the Public Bill Office is clear on the question of resource implications. It stated that, where assistance was given with the drafting of explanatory statements,
	“this took little time (no more than five minutes per amendment), and usually saved time elsewhere by establishing a verifiable shared understanding of what amendments were intended to achieve.”
	So the idea that this would create a burden for the Opposition and Back Benchers is not supported by the Public Bill Office, which has made it clear that the statements typically save time.
	The Public Bill Office also stated:
	“It is not that difficult to draft a brief explanatory statement, and a Member seeking to table an amendment might want to think again about doing so if they were unable to explain briefly what it would achieve.”
	This brings us to the nub of the issue. Do we want Back Benchers to participate or not? Do we want our constituents and our local press to be able to follow what is going on? Do we want this to be possible at all times or only some of the time, and who gets to be the judge of when people should or should not necessarily get to receive these explanations? If we want scrutiny, surely we have to make sure that those who might scrutinise are properly assisted to do so; otherwise, one might ask what is the point of the amendments at all.
	Still on resources, the Clerk of the House produced a helpful memorandum pointing out that there would be no extra costs to the PBO, but there could be some printing costs. However, once self-explanatory and consequential amendments are discounted, the printing costs would clearly be very low. In the context of the entire printing costs of this place, the likely cost for this is tiny—less than 0.00005% of a £7 million annual spend on the printing of procedural publications.
	For that minimal cost, we would get something valuable—information, and information being given to those who should have it as they vote on legislation that affects us all. When the bell goes, we should all know why. Brief explanations would not only allow Members to check what they are voting on when the bell goes, but allow us to see in advance what Members seeking to amend legislation are attempting to do. This would
	enhance scrutiny and might even increase participation in the Chamber, as Members could easily see in advance what an amendment was for.
	In conclusion, I hope hon. Members will agree that this is more than procedural housekeeping. I think our constituents would be shocked if they knew that their MPs often did not know what they were voting on. When I run down the escalator from Portcullis House at the same time as many other colleagues, I often hear people saying “What are we voting on; what are we voting on?” I am not whipped, so I have to find that out myself, but many colleagues do not necessarily have that information, and I think that they should. This is not a criticism of colleagues. I have no doubt that MPs do not like trying to find out what the vote is on as they run down the escalators. The point is that this information is not being properly provided. It is good that the Procedure Committee is calling for a scheme to make explanations possible, so let us make sure that everyone uses it.

Charles Walker: I have some sympathy for the hon. Lady’s argument. The problem we all have is that we are sent here to legislate, but we fill our time with so many other things that we actually forget our primary role, which is to pay attention to what is going on in this place and to scrutinise the Government. One reason why we often do not know what is going on is that we choose—we make the choice—not to know what is going on.

Caroline Lucas: There is some truth in what the hon. Gentleman says, but if the conclusion of what he said is that he genuinely expects 650 Members to be in this Chamber—day in, day out—to scrutinise all legislation, I think he is more optimistic than I am, because I do not think that is likely. I believe we also have other important roles, such as providing scrutiny through Select Committees, which are every bit as important as at least some of the debates in this Chamber. It is a realistic assumption that not everybody can be here.
	In conclusion, I hope hon. Members will vote for amendment (a) to give Back Benchers and the public a right to explanations of what we vote on in this House. We have an opportunity tonight to restore trust in what we do, to show that we want to scrutinise and to make the way in which this place operates healthier and more transparent, so let us take it.

Jacob Rees-Mogg: It is a great pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas), and it is one of my parliamentary ambitions that, one day, when speaking after her in a debate, I shall actually agree with her. Sadly, that day has not yet dawned.
	There are extremely good arguments for requiring the Government compulsorily to make explanatory statements. The Government have legions of civil servants who are able to draw up their explanations; they have all the resources of a Rolls-Royce Whitehall system that is able to provide the explanations to everything that goes into legislation. Crucially, the amendments proposed by the Government usually do end up in legislation, so not only are the resources there, but an invaluable purpose is served in making clear what the Government are trying to do.
	If the hon. Lady’s amendment (a) had said that the Government always and invariably had to put down explanatory statements, I would have agreed with it, because that would have enhanced our ability to legislate. When, however, it comes to requiring every Member to do so and to giving exceptional discretion to the Speaker or the Speaker’s deputies to decide whether these explanatory memorandums are sufficiently in order, I cannot agree. Let me explain why briefly, because I know many want to go off and have their dinners or conduct Adjournment debates and things like that—the Adjournment debates are probably more attractive than dinners for most of us.

Nigel Dodds: The hon. Gentleman is making a compelling case for attaching explanatory memorandums to Government amendments. Does he think that the same should apply to official Opposition amendments, and that a distinction should be made between amendments in those categories and amendments tabled by individual Back Benchers?

Jacob Rees-Mogg: No, I would not go as far as that. One of the great divides in parliamentary life is represented by the fact that the Government always have officials beside them. We see in the Box this evening three extremely distinguished gentlemen who are there to advise the Government and help them to plan their legislation. The Opposition have some Short money, which helps them with their parliamentary activities, but, unlike the Government, they do not have the depth of resources that would enable them to provide the explanations that might be needed.
	It is assumed that we live in a perfect world in which legislation is presented after pre-legislative scrutiny and there is much time for consideration and deliberation, but that is unfortunately not true. A great deal of legislation is quite rushed, and comes to the House at quite a late stage. The Opposition sometimes have to trawl through many hundreds of clauses in a Bill, and, while they may have just about enough time to write out their amendments, even if each amendment takes only five minutes to explain, 100 Opposition amendments will mean 500 minutes that Opposition Members may not have when a Bill is due to begin its Committee stage within a week or two—or sometimes a day or two—of being presented to the House. I therefore think that the burden placed on the Opposition would be unfair and disproportionate.
	Given that I am speaking partly from personal experience as a Back-Bench Member of Parliament, I want to pay particular tribute to the Clerks of Legislation, who are incredibly helpful and patient in explaining to Back Benchers how to formulate an amendment so that it is in order. However, to ask them then to write an explanatory memorandum when so many hundreds of us could be calling on their time would be to place an unreasonable burden on them. Their patience, courtesy, capability and knowledge of the history of Parliament are an absolute joy to behold, and every dealing that I have had with them has been a real pleasure, but I do not think that it would be reasonable to impose that extra burden on them.
	This takes us to the heart of the way in which the Government are held to account through the legislative process. Those of us who table amendments know that
	our amendments will almost certainly not pass into law. Indeed, on most occasions when I have tabled amendments I have not pressed them to a Division, because I have known that the massed serried ranks on the Government Benches will not be sufficient to get one Back Bencher’s amendment through, however well thought out it may—or may not—have been.
	Members table amendments to ensure that the issue is debated, that the Minister is able to think about it, and that it is considered in proper detail by the Minister and the Minister’s officials. The Opposition do exactly the same, in the knowledge that the points that they raise will be considered during the overall process. That process would be weakened and made more difficult if the explanatory memorandums were compulsory. If they were compulsory, the Opposition would perforce table fewer amendments, and Back Benchers would be deterred from tabling amendments because of the extra burden that it would place on them, and because of a certain diffidence about putting more pressure on the Clerks of Legislation.
	In an ideal world, everything would be spelt out and there would be a few more pages of printing. I am delighted that the Greens seem to be in favour of that: it appears now to be their official policy. Normally a desire for more printing reflects my view of the world rather than theirs. The reality of legislating, however, is that it is often done in a hurry because the necessary time is not available. It is a matter of holding the Government to account, and anything that obstructs that process makes it harder for Members to do their jobs.

Michael Meacher: Not for the first time, I find myself in complete disagreement with the hon. Member for North East Somerset (Jacob Rees-Mogg). I shall endeavour to explain why, but let me first express my genuine appreciation to the hon. Member for Broxbourne (Mr Walker), the Chair of the Procedure Committee, who has brought a breath of fresh air to the important issue of reform of parliamentary procedure.
	I support amendment (a). Despite what I have just said, I believe that the Committee’s modest position represents a major missed opportunity, in that the gain from making brief explanatory statements mandatory is enormous, while the extra effort required to achieve it—and here I strongly disagree with the hon. Member for North East Somerset—is minuscule. At present, particularly on Report, Members who have not participated in Committee often do not know, and have made little or no effort to find out, what precisely they are casting their vote for. Anecdotal evidence suggests the proportion could be as high as seven or eight out of 10. This is of great significance because, particularly if the Government Whips have exercised a tight leash over Committee stage, the Report stage is often the only real opportunity for the House to modify the content of the Bill. The debates on Report are usually focused on important issues where strong views are known to be held by the public. Echoing what the hon. Member for Brighton, Pavilion (Caroline Lucas) said, it is a reasonable assumption that if the public were more widely aware that these
	matters of considerable importance to them were treated in such a cavalier fashion by many, if not a great many, Members who often vote blind—and I confess that I am one of them occasionally, because of the difficulties of finding out exactly what we are voting for—there would be a huge outcry that Parliament was abusing its proper functions.
	Currently, if a Member is diligent—and many are, of course—they will need to obtain a copy of the Bill, a copy of the list of amendments and, on the day, a copy of the grouped amendments selected by the Speaker. A number of Members with a particular interest will undoubtedly do this, but in most cases I submit it will be a minority. In the absence of obtaining the necessary documentation and reading it in order to understand the point at issue and reaching a considered view, the default position, as we all know, is for Members to follow their Whips on arrival in the Chamber.
	Even if a Member did take the trouble to get and read the relevant documents, it is often quite difficult for someone who has not been following a Bill closely to understand what precisely the amendment is designed to do. This adds up to quite a serious flaw in the whole process of scrutiny of Government legislation, which is the central function of Parliament. It can be so easily remedied by requiring that a short statement of no more than 50 words explaining the purpose is attached to every amendment on the Order Paper and reproduced on the television monitor.
	What are the objections? Here I come to the points made by the hon. Member for North East Somerset (Jacob Rees-Mogg). I chair the all-party parliamentary group for reform of parliamentary procedure, and the only objection raised with us is that while the Government have their civil servants to deal with amendments and provide explanatory statements, the Opposition do not have the same resources and adding the requirement for explanatory statements would impose too great a burden.
	I simply do not accept that that objection is tenable. Speaking as someone who in my 43 years has taken many Bills through the House, I know that it certainly takes a huge amount of time to get to grips in particular with a large Bill—to consult outside experts over all its detailed aspects, to identify areas where modification needs to be sought and to draft amendments in an appropriate parliamentary form. Once hundreds of hours have been expended on doing that, however—that has to be done by any responsible Front Bench—adding a short statement distilling the essence of an amendment would take less than half a minute.
	There is already evidence that a large majority of the House is in favour of this proposal Many hon. Members have indicated how helpful they found the two recent pilots when the Government introduced this reform for two recent Bills. In addition, Parliament First—that is the name of our all-party group—carried out a survey of all Members seeking their reaction to six proposed reforms of the House procedure, including explanatory statements. I have the results here and I will show them to anyone who cares to look. The response rate was more than 20%, which is not bad for parliamentarians. Of those respondents, 87% were in favour of explanatory statements, and there was very little difference between the two main parties.
	This is a modest reform. The gain to everyone would be enormous and the effort to bring it about in practice is relatively tiny. I hope that, for those reasons, the House will support amendment (a).

David Heath: Those hon. Members who recall that I used to sit where my right hon. Friend the Deputy Leader of the House now sits, long into the night discussing similar matters, may think it an act of sublime masochism for me to be standing here prolonging proceedings this evening, but I feel strongly about this issue. I do not want to detain the House for long, but I wish to express my support for the position of the hon. Member for Brighton, Pavilion (Caroline Lucas), because I simply do not recognise the arguments adduced against what has been suggested. I well recall the pilots, because I was the Deputy Leader of the House who proposed the pilot scheme. I was also one of the Ministers for one of the two Bills—the Electoral Registration and Administration Bill—involved in the pilot. On the part of government, I did not see it as an excessive burden, and nor do I believe that the civil servants who supported us found it an excessive burden simply to state the purpose of Government amendments for that Bill.

Zac Goldsmith: I am not surprised to hear that my hon. Friend supports the amendment, which I will also be supporting if it comes to a vote. Does he agree that even if it does add an extra burden and its requirement leads to extra work, it is a small price to pay for improving the legislative process? The one thing we are all paid to do here is to legislate, and people often have no idea what they are voting on. Surely that is a scandal and it requires a bit of investment to address it.

David Heath: I am grateful to my hon. Friend for that. I agree that it is better to have clarity, so that not just Members in this House but others looking at our proceedings can understand what we are debating.
	There are other benefits to be had. I have always had this romantic view that we can improve the procedures of this House and do things in a more effective, focused and timely way. That would help everybody who has come to a debate on amendments and found that the purpose of the proposer of an amendment was quite different from what they had imagined when they first read it. That applies not only to Back Benchers, but to the Government. Very often Ministers have learned screeds of paper telling them what the civil servants who support them in the Bill believe the Opposition Member was intending by their amendment, only then to find that that was absolutely a wrong guess.

Wayne David: Inadvertently, the hon. Gentleman has made an astute point, because it is wrong to believe that all amendments have an objective truth about them. Amendments, particularly those from the Opposition, often have different interpretations attached to them. He mentioned the Electoral Registration and Administration Bill, which is a good example of when our interpretation of what we were putting forward was objectively different from that of the civil servants. The essential clarification often is provided through debate, not by declamatory written statements.

David Heath: The hon. Gentleman will find that I make many astute comments and they are never inadvertent. No, that is not the tension we want in the House; we want understanding, and we want sensible debate focused on the issues at stake, not guesswork as to what those might be. It does not matter whether it comes from the official Opposition, a Back-Bench Member or the Government: clarity is an addition and support to the value of our debate in this House. I find it difficult to understand why anyone would take a different view.
	I know that whichever way the debate goes this evening, the Government will produce an explanatory statement every time an amendment is tabled. I have no confidence, I am afraid—for the reasons exemplified by the approach of the hon. Member for Caerphilly (Wayne David)—that the Opposition will do the same. I am afraid that the argument that they do not have the resources to produce such statements is a canard. First, as the right hon. Member for Oldham West and Royton (Mr Meacher) said, it takes very little resource to do so. Secondly, let us explode the myth that every Member who tables an amendment writes it himself or herself. That is not the case. Amendments are often prepared by well-resourced outside bodies that would have no problem whatsoever providing an explanatory statement. If all else fails, the official Opposition have something called Short money—a considerable amount of money to support their parliamentary activities, including the tabling of amendments. What is the problem?
	I believe that the amendment is sensible and I will support it this evening. Let me finish on one specific point. I note that the Chair of the Procedure Committee has been supported in a remarkable act of solidarity by the Leader of the House, the Deputy Leader of the House, the shadow Leader of the House and the shadow Deputy Leader of the House. Although I am glad that they can provide that support to the Procedure Committee, I wonder whether that is appropriate on what is essentially a House matter concerning our procedure. It appears to oblige the payroll vote to support the original motion rather than to vote according to what those Members consider to be the rights and wrongs. I am afraid that I think that this is a matter on which the House should decide, not the Government.

Charles Walker: May I reassure the hon. Gentleman that in the past three and a half years I have never sought the support of the Executive in any way, as demonstrated by my voting record? If they want to support a recommendation made by the Procedure Committee, that is entirely down to those on the Front Bench, but it is not something that I have sought or would ever want to see.

David Heath: I absolutely accept that statement and it doubles my admiration for the solidarity expressed by those on the two Front Benches in supporting the hon. Gentleman. However, as a consequence of that, many members of the Government are sitting watching monitors wondering whether this chap will ever shut up so that they can move towards a vote. They are obliged to stay here to ensure that a rebel amendment tabled by the hon. Member for Brighton, Pavilion does not succeed. I regret that, but I hope that we will have a sensible debate and that whichever view prevails this evening, every amendment will eventually have a short explanatory statement stating what the devil it is for.

Thomas Docherty: I am grateful for the opportunity to speak in what I am sure will be a short debate. It is perhaps worth clarifying one point for the benefit of the Chair of the Procedure Committee, on which I have the privilege to serve. He referred to those who had signed the motion and I think he perhaps inadvertently suggested that I was the shadow Deputy Leader of the House. I do not have that great privilege; that more august position is held by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith). I think that reference was probably an oversight on his behalf.
	The debate so far has been fascinating and great passion has been expressed about clarity and resources. Like other colleagues, I have the highest admiration for the House and the House service. I am always in bewildered awe at the great education that our Clerks have had compared with ours. As colleagues who have tabled amendments over the years will know, we are often up against tight timetables. There are archaic rules about when amendments must be tabled by and I think it places an undue burden on the House service to expect that when someone comes in up against the deadline—[Interruption.] The hon. Member for Somerton and Frome (Mr Heath) chunters from a sedentary position, as ever, about short deadlines. I cannot help but recall the number of amendments he tabled at the very last minute when he was a Minister, yet he criticises those colleagues who are forced to wait until the very last minute. The notion that we would rule out a perfectly reasonable and well thought-out amendment because it did not have an accompanying explanatory statement is anti-democratic. I am disappointed—I genuinely have great respect for the hon. Gentleman.

David Heath: I am puzzled by what the hon. Gentleman is saying. Is he saying that the procedures of the House really do not matter, and that we do not have to be in accordance with them when tabling an amendment, provided that it is a really important amendment, or does he accept the fact that the rules are there to aid debate, and that there is a back-stop provision, as the Chair can always rule something in order, as they do frequently with manuscript amendments?

Thomas Docherty: I am grateful to the hon. Gentleman for making that point, which leads me nicely to the point that I was going to make about “Erskine May” and the discretion of the Chair. You are a wonderful Chair, Mr Deputy Speaker, held in the greatest regard by Members on both sides of the House. The whole House has the highest regard for your observations and the way in which you guide us through difficult debates. “Erskine May” makes it clear that colleagues should not read out speeches, but with great discretion, Mr Deputy Speaker, you allowed the hon. Member for Brighton, Pavilion (Caroline Lucas) to read her speech. The House rules would say, following the intervention of the hon. Member for Somerton and Frome, that that would not be allowed. The notion, Mr Deputy Speaker, that we would expect you to overrule the consensus of the House is probably unfair on you, and the hon. Gentleman has therefore placed too great a burden on your august shoulders. It is wrong to place the Chair in that position.

Mark Durkan: My hon. Friend seems to labour under the apprehension that the Chair will be put in an undue position of power over selection, and will have power that they do not already enjoy. However, has he not noted the point made by the Public Bill Office on page 10 of the report that
	“An alternative would be to allow orderly explanatory statements to be tabled on the day after the deadline for tabling the amendments themselves. It would, of course, be for the Speaker or Chairman of Ways and Means…to select an amendment”
	afterwards? That would overcome the problem that my hon. Friend raises that Members should not be expected to provide an explanatory statement before the deadline.

Thomas Docherty: I am always grateful to my hon. Friend, who is a genuine parliamentarian. However, as I have said, this is about putting a greater onus on the Chair of a Bill Committee or the Chair in the Chamber. I do not think that we want to add to those burdens. We have some wonderful Chairs who chair proceedings with a light touch. I fear that there would be complaints from the Government, the Opposition, the minority parties and Back Benchers saying, “Why has that one been allowed in, as an explanatory statement was not scheduled in time?” We have seen too often that, because the Government have tended to introduce Bills at the last minute—I am thinking of the gagging Bill in September—it would be difficult for my hon. Friends to table amendments, then produce explanatory statements.
	I genuinely welcome the fact that the Government have made it absolutely clear that they intend for all their amendments to provide explanatory statements whenever practicable—I take their word on that. I had a slight exchange with the hon. Member for Somerton and Frome, who said with some justification, to be fair, that when he was a Minister explanatory statements were produced for all his revisions. I suspect that his civil servants had a hand in the drafting of those statements, but that is not a luxury that the Opposition or, indeed, Back Benchers enjoy. If the Government wish to expand the resources available—

Wayne David: Does my hon. Friend accept that there could be a strong case for mandatory explanatory statements if the Opposition had exactly the same resources at their disposal as the Government?

Thomas Docherty: That is a fair point. I do not think that I am giving away anything when I say that that was one of the discussions that the Procedure Committee had with the Front-Bench team and the House service. Regrettably, however, in these austere times, that is not on the table. If it were, I would wholeheartedly support the amendment, with the caveat that Back Benchers should be given greater resource.
	It is something of an insult to parliamentary colleagues to maintain the myth that Members of Parliament are confused or vote the wrong way. I am conscious that Liberal Democrats may see that as a good excuse at the next general election to explain why they voted for a series of measures—“I am very sorry. I didn’t realise what I was voting for”—but I am not aware of a single case where a Liberal Democrat MP will argue that they voted to increase tuition fees or break their other promises because they were confused about what the motion or amendment meant. Perhaps the hon. Member for Somerton
	and Frome will correct me. The idea that the hon. Member for Brighton, Pavilion is promoting that Members are confused about what they are voting for is utter nonsense.

Mark Durkan: I thank my hon. Friend for giving way again. He must recall that friends of his in the House were perturbed to find that they had voted a particular way on an amendment to the Succession to the Crown Bill without realising, they said, that it had implications for religious equality—something for which they would not have voted. If explanatory statements had been required on all amendments to the Succession to the Crown Bill, Members would have known exactly when they were voting to keep sectarianism in the British constitution and when they were not.

Thomas Docherty: I will not comment on how many friends I have in the House.
	In conclusion—

Zac Goldsmith: Will the hon. Gentleman give way?

Thomas Docherty: I want to wind up to let others get in.
	A Select Committee has considered the issue at great length and brought forward a procedure. It is slightly ironic that we are now hearing so-called Parliament First parliamentarians saying that we should reject the wishes of the Select Committee which was tasked with examining the issue. I look forward to hearing other views.

David Nuttall: There are essentially two issues before us this evening. The first is whether explanatory statements are a good thing or a bad thing. There is pretty much agreement on both sides of the argument that they are a good thing. The second and more difficult question is whether explanatory statements should be compulsory. My view is that they should not be compulsory. I think they are a good thing and I congratulate my hon. Friend the Member for Broxbourne (Mr Walker) on the way that he opened this short debate. I thank, in his absence, my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), who was the previous Chairman of the Committee.
	Opening the debate, my hon. Friend the Member for Broxbourne made clear the view of the Committee that, having considered all the evidence, we felt that on balance a permissive regime was better than a mandatory one. I accept that the argument is very finely balanced. My own view is that, although it is easy for the Government to table explanatory notes, as they do in the case of a Bill, which is entirely right, it should not be made mandatory for a Back-Bench Member to do so. However, any Back Bencher who takes their amendment seriously and wants to persuade the House of its merits will want to table an explanatory note, but it may be that, for whatever reason, they do not wish to do so. They may prefer to inform Members of the merits of their amendment by circulating a letter to colleagues, circulating an e-mail, holding a briefing meeting or even establishing a website or tweeting about the amendment. They may have other ideas about how to do it. I do not think that they should be precluded from tabling an amendment just because they have not filed an explanatory statement.
	I am conscious that it is late and Members have other engagements, but I wanted to place on the record my view on the matter. I support the substantive motion and oppose the amendment.

Sarah Wollaston: I think that this is quite straightforward: if a Member cannot explain the purpose of their amendment, why did they table it in the first place? Perhaps my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) would find that his amendments had greater support if their purpose was set out clearly for Members to see. Many Members have referred to the extra costs that might be involved, but surely they are nothing compared to the costs of poorly drafted legislation. As for the cost in trees, not a single extra tree would have to be felled if the House moved towards the 21st century and had all amendments and explanatory notes delivered to Members’ iPads so that they could be absolutely clear about what they are voting for. I see no excuse for not moving towards such a system, which would improve the quality of legislation. I hope that Members will support the amendment.

Zac Goldsmith: Thank you, Mr Deputy Speaker, for allowing me to make a very short speech in support of the amendment tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas). There is no job description for Back-Bench MPs, but if there was it would be to hold the Government to account on behalf of their constituents. That is very hard to do, given the busy schedule, with Select Committee meetings and all the other obligations MPs have, if the likelihood is that when the Division bell rings we will not know what the amendment we are being asked to vote for actually represents. I would be interested to hear whether the hon. Member for Dunfermline and West Fife (Thomas Docherty) can tell us honestly—he is welcome to intervene—that he has never voted for an amendment that he did not understand. I would be very surprised if he can.

Thomas Docherty: I have never voted for an amendment and later regretted doing so.

Zac Goldsmith: That sounds more like luck than anything else. If he did not know what he was voting for, there is every chance that afterwards he might have regretted it, so he is very lucky that has not happened.

Sarah Wollaston: Does my hon. Friend agree that it would be very interesting to call a Division now to see how many Members arriving in the Chamber could tell what they were voting for?

Thomas Docherty: rose—

Zac Goldsmith: I give way to the hon. Gentleman.

Lindsay Hoyle: Order. One at a time. I do not know whether the hon. Gentleman wants to respond to the hon. Member for Totnes (Dr Wollaston) first.

Zac Goldsmith: My hon. Friend makes an interesting observation. It would be a beautiful irony and I would love to see it happen.

Thomas Docherty: I do not want to detain the House, but I should make it clear that if I have ever been confused in advance, I have asked one of my parliamentary colleagues, or perhaps those friendly Whips, about what was going on. Also, it would have been really helpful if there had been an explanatory statement for this amendment.

Zac Goldsmith: I take the point. There have been many occasions in the short time I have been in the House when I have had to seek advice on votes I was being asked to cast. I have asked many Back Benchers on both sides of the House and the Whips but have still been unable to understand them or get any kind of clarity. I have had to abstain in Divisions because I simply did not know what the amendments I was being asked to vote for were about.

Wayne David: Is the hon. Gentleman confident that he understands every explanatory statement he reads?

Zac Goldsmith: I think that we would stand a much better chance of understanding what we were voting for if the amendments had explanatory statements.
	I reject the argument that this would place an undue burden on Back Benchers. I accept up to a point that an extra burden would be placed on opposition parties because, as my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, for Members tabling 100, 200 or 300 amendments that amounts to quite a lot of minutes, but I believe that they should be given the administrative support they need to achieve that. However, that does not apply for Back Benchers, because they rarely table more than a small handful of amendments, unless they have set out to become parliamentary pests. They will have spent a lot of time understanding how to table them, so the extra five, 10, 15 or perhaps 30 minutes required to explain them is not much to ask. If a Back Bencher is not willing to invest those 30 minutes in the explanatory notes, perhaps they ought not to be wasting our time with the amendments in the first place.
	This is a very small measure—a very small price to pay—that would undoubtedly, unavoidably and unarguably improve the legislative process in this place. I believe that people are appalled by some of the things that have happened here over the past few years, not least the expenses scandal and the more recent issue relating to fuel, which could be described as a scandal. The far bigger scandal is the fact that the one thing we are paid to do, we do not, on the whole, do anything like as well as we should, because we often simply do not know what we are doing. That is a scandal that can be rectified so easily with this small measure proposed by the hon. Member for Brighton, Pavilion.

Angela Smith: Let me place on record my thanks to the Procedure Committee for all its work on this important issue— not just on this report but on previous reports. I particularly thank the Chair of the Committee, the hon. Member for Broxbourne (Mr Walker), for the work that he has done and I know will continue to do on matters relating to House business. We welcome the recommendations made by the Committee and the commitment in the motion to ensuring that the resources of the Public Bill Office will be made available to Members to assist in the preparation of explanatory statements.
	We have had a very good and robust debate, but one point that has been overlooked is the actual wording of the motion, which corrects an anomaly in the current system that we have enjoyed so far in the pilots whereby it has not always been possible to call on the Public Bill Office to support the work we are doing in tabling amendments and making sure that explanatory statements are available. We are pleased that the Committee is recommending a further period in which to allow this innovation to embed itself, because more time is needed to test the process further—this time in a context whereby the practice of tabling explanatory statements is used more extensively by Members.
	There are two reasons, as we see it, for supporting this approach. First, it is important for the House to bear in mind that the official Opposition, who of course have to take a comprehensive approach to the scrutiny of legislation passing through this House, would face a significant extra burden through engaging in the business of drafting explanatory statements to all amendments that they wish to table for discussion in the Chamber. Much of the legislation we deal with is very complex and requires careful consideration on a political and a technical level, and we have to bear this in mind if we want to avoid a situation in which we actually deter effective scrutiny of legislation because we have, in practice, restricted the number of amendments that can realistically be tabled by the Opposition. It is probably the first time I have been able to say this, but I agree with the hon. Member for North East Somerset (Jacob Rees-Mogg) in the comments he made on this point.
	Secondly, we need to test how the Government respond to any significant extension of the use of explanatory statements, in the sense that it could prompt serious questions about the timetabling of legislation in this House. The pressure on the official Opposition to develop their approach to scrutiny of Bills in Committee is, more often than not, intense, and an extra work load would make it even more incumbent on the Government to improve their scheduling to ensure that adequate time is made available for the development of Members’ approach to scrutiny. Having served with my hon. Friend the Member for Caerphilly (Wayne David) on the Bill teams for the Electoral Registration and Administration Bill and the recent gagging Bill, I can absolutely testify to the intensity of the process and the very short time frames that were made available, in both instances, to table the amendments and get them ready for discussion on the Floor of the House.
	In our view, the permissive approach rather than the mandatory approach should be agreed by the House to ensure that any problems are teased out and, we hope, resolved. That is an important part of the process, and it should precede any decision to make explanatory statements mandatory. We think that explanatory statements are a positive innovation. We hope that Front Bench teams and other Members of the House adopt them as we work through legislation.
	We are confident that the Procedure Committee, so ably led by the hon. Member for Broxbourne, will monitor progress and bring the issue to the Floor of the House to report on progress and make further recommendations if that proves to be necessary. That is the key point—if it proves to be necessary. We hope that the new system, whereby explanatory statements can be tabled for all legislation, will embed itself so successfully
	that we will not have to return to the issue. We must give it a chance to see how it works before we move to the more draconian measure of making such statements mandatory.
	The Opposition support the motion but, for the reasons that I have outlined, do not support the amendment tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) and will vote against it if a Division is called.

Tom Brake: The Government support the motion. I thank the Chair of the Procedure Committee, my hon. Friend the Member for Broxbourne (Mr Walker), for his thoughtful and charmingly concise opening comments, and for explaining to the House the reasoning and conclusions of his Committee. I will set out a little of the history that has led to this debate, although I am a little disappointed that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) did not do so. I will then explain why the House should support the motion and reject the amendment.
	The report to which the motion refers was published by the Procedure Committee on 25 February 2013 and the motion appeared on the Order Paper before the summer recess, but consideration of this issue can be traced back to Modernisation Committee report in 2006 recommending that the Procedure Committee draw up a set of rules governing the tabling and publishing of explanatory statements on amendments to Bills on an optional basis during Committee stage. That followed evidence from the team on the Health Bill that was introduced in 2005, which said that such statements would help to ensure that
	“when we are briefing our ministers and advising them how to respond, the issues the Member really wants debated are covered and we really are responding to the queries or concerns that are being raised.”
	It is of assistance to Ministers, Members and the public if there is clarity about amendments, if debates are informed and if scrutiny is as effective as it can be.
	Following the report, several pilots were conducted. Although the Procedure Committee concluded that explanatory statements were useful, take-up of the facility was disappointing. The overall assessment of the value of explanatory statements was inconclusive.
	Following discussions in this Parliament between the Procedure Committee and the Leader of the House, it was decided that a further pilot should take place on two Bills, the Electoral Registration and Administration Bill and the Small Charitable Donations Bill. Criteria for evaluating the pilot were agreed and the Public Bill Office was tasked with preparing a memorandum evaluating the pilot. That was published as part of the Procedure Committee’s report, so I will not attempt to summarise it. The memorandum led the Procedure Committee to recommend a system of voluntary explanatory statements for all Bills at the Committee and Report stages. The Procedure Committee concluded:
	“The evidence from the pilot suggests that there are few downsides to a permissive approach.”
	I agree with that.
	The amendment asks the House to resolve
	“that explanatory statements on amendments be mandatory”.
	After a playful intervention by the hon. Member for Dunfermline and West Fife (Thomas Docherty), the hon. Member for Brighton, Pavilion (Caroline Lucas), who moved the amendment, said that he was smirking in an irritating way. I know the hon. Gentleman well and he does not smirk in an irritating way. I would describe it more as an impish smirk. I accept that there is sense behind the amendment, particularly given the argument that it is easier to instil a cultural shift by making something mandatory and that a failing of previous pilots was the low take-up of the facility. However, I hope that I will be able to persuade supporters of the amendment not to press it to a vote, but to join those of us who want explanatory statements to become
	“an accepted norm of the legislative process.”
	The publication of explanatory statements will not guarantee that a Member understands the Bill. A Member who looks at the explanatory statements in isolation and does not have an understanding of the Bill will not be guaranteed to understand the amendments. If explanatory statements are published, it will require Members to read them to understand their implication. As the right hon. Member for Oldham West and Royton (Mr Meacher) said, according to a statistic he has, seven out of 10 Members apparently vote without knowing what they are voting on. I am therefore not sure I have full confidence that if explanatory statements were put on a mandatory basis, each and every Member would read them and be fully informed about the purpose of the Bill.
	There are good reasons to argue for a permissive approach, and I thank my hon. Friend the Member for Bury North (Mr Nuttall) for his support in that respect. The Procedure Committee argues that a mandatory requirement would restrict Opposition Back Benchers in tabling amendments. I am afraid I have to disagree with my hon. Friend the Member for Somerton and Frome (Mr Heath)—a gamekeeper turned poacher in this respect. He referred to Short money being available to the official Opposition. That is true, but he will remember that when we were in opposition, even with Short money, there was difficulty dealing with the volume of amendments. I am sure he will also acknowledge we are now in a coalition Government, and Short money is not available to the coalition partners. In fact, in many cases when one of the parties seeks to table an amendment, there is no support for that at all. I must therefore disagree with my hon. Friend, as I do with the hon. Member for Richmond Park (Zac Goldsmith), who must acknowledge that simply producing explanatory notes is no guarantee that a Member of Parliament will read them—although clearly I hope that that would be the case.
	It is accepted, I think, that the burden would fall heavily on Her Majesty’s official Opposition, who table a significant proportion of amendments. It is always best to proceed in this area of parliamentary reform on the basis of consensus. I am surprised that the hon. Member for Brighton, Pavilion, and others who support the amendment, do not want to proceed on the basis of consensus. Of all Members in this House I would have thought the hon. Lady favoured the idea of proceeding on that basis.
	Should the House decide to go down the mandatory route in future, it would be free to do so, but it would be on the basis of a fuller consideration of the burden—
	perhaps with a further pilot on a mandatory basis—and full consideration of some issues not fully addressed in the report. Those could include, for example, whether an amendment would be refused for tabling by the Public Bill Office if it were not accompanied by an explanatory statement, or if that statement was felt to be in some way disorderly—that could certainly put the Public Bill Office in a difficult position. If explanatory statements were made mandatory, more thought would need to be given to what constitutes adequacy and accuracy in explanatory statements, and who would rule on such issues. Those issues could be considered by the House in the future, but it should not be left to the Chair to consider and rule on such procedural reforms in the way proposed by the amendment to today’s motion.
	I am grateful to those in the Public Bill Office, in particular the Clerk of Legislation, for the assessment of the pilot, and for confirmation that they would be happy to consider further the issues we have discussed today if that is felt necessary. I am extremely grateful for the positive commitment they have made to assist all Members in preparing explanatory statements—the hon. Member for Broxbourne referred to the fact that he could hear them champing at the bit, and if we listen carefully I think we can hear them champing right now to assist Members in preparing explanatory statements. That commitment is noted in the motion before the House and will help encourage the facility to become part of the culture of the House.
	As with the pilots, I expect Government Departments to play their role and actively participate in the new arrangements. Should the House agree the motion tonight, I expect the Government to table explanatory statements on amendments for Bills introduced to this House after 1 January 2014. The Cabinet Office will produce guidance for Departments on the issue, and I am happy to commit to deposit that in the Libraries of the House for the convenience of all Members.
	I am sure Her Majesty’s official Opposition, with the assistance of the House authorities, will also up their game from the pilots. As the Procedure Committee said, a more widespread use of explanatory statements “should underline their utility”. I thank the Procedure Committee for its work on this issue. I urge colleagues not to press the amendment to a vote and for us to push forward on a consensual basis, and I commend the motion to the House.

Question put, That the amendment be made.
	The House divided:
	Ayes 23, Noes 142.

Question accordingly negatived.
	Main Question put and agreed to.
	Resolved,
	That this House approves the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979, noting that the Public Bill Office will assist Members as required in the preparation of such statements.—(Amber Rudd.)

Business without Debate
	 — 
	DELEGATED LEGISLATION

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People, Northern Ireland

That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 2013, which were laid before this House on 18 July, be approved.—(Amber Rudd.)
	Question agreed to.

THE BITTERN

Motion made, and Question proposed, That this House do now adjourn.—(Amber Rudd.)

John Denham: I am grateful to have the opportunity to open the debate, and I pleased to speak for the first time under your chairmanship, Madam Deputy Speaker.
	I should perhaps explain to any bemused constituents who might be watching that Adjournment debates are applied for in advance, without any knowledge of the day’s news. Some of my constituents might wonder why I am talking about a pub and not about the loss of 1,000 jobs in Portsmouth, which affects many of my constituents. None the less, I hope people will see the importance of this local issue.
	At one level, the debate is about one pub and one community, and about their struggle to keep their pub open. In fact, they do not want to just keep it open. They want to go one stage further: they want to buy it for the community and run it as a community pub. That pub is The Bittern on Thornhill park road in Southampton, but what has happened at The Bittern has an echo in pub campaigns across the country. In brief, the point I wish to put to the Minister is that legal loopholes mean that the intentions of Parliament, which are supported on all sides of the House, are being thwarted. I will put three practical proposals to the Minister for the action he could and should take to rectify the problems.
	The Bittern is a popular community pub on a busy road between two council estates, in Southampton—Thornhill and Harefield. The next nearest pub is two thirds of a mile away; and most other pubs are well over a mile away and serve very different communities. Let me be clear that The Bittern is not a picturesque country pub; nor is it a bijou eatery with a bar hoping for its first Michelin star.
	Architecturally, it is an attractive building, which was built in 1933 to an original art deco design. Both its interior and exterior are in need of refurbishment, but it remains largely as it was when it was built. The distinctive and original Crittall windows are still in place and functioning, but there are not quite enough of the original features in place for it to be listed. Yes, the pub could do with a lick of paint and some sprucing up, and it might not be the pub of choice of all my constituents, but it is a pub that many local people use and like. Some pubs which serve local communities become closed, unfriendly, and unwelcoming, but not The Bittern. It feels like pubs used to feel: warm, friendly and welcoming.
	Earlier this year, rumours began that the owner, the giant pubco Punch Taverns, was not going to renew the landlord’s lease and wanted to sell to McDonald’s. It was no surprise to me that the community wanted to do everything it could to hang on to its pub. Taking advantage of new legislation, it decided to get its pub listed as an “asset of community value”. As the Minister will know, under the Localism Act 2011, the community would then have the right to exercise the new community right to bid to try to buy the pub if and when it came on the market. As he might also know, the idea of the community right to bid was first put forward when I was Secretary of State for Communities and Local Government, so I am quite attached to the idea of communities being able
	to buy and run their own pubs. I was delighted, therefore, when the new Government took those ideas forward and developed them more fully in legislation.
	Earlier this year, the community bid was put together, submitted and supported by the necessary 21 local residents and with a great deal of support from local councillor Mary Lloyd. It was submitted to Southampton city council on 22 May. To be listed as an “asset of community value”, a pub needs to be more than a boozer, and the application stressed the pub’s consistent fundraising for charities—this is largely a community with more warmth and generosity than money, but still it regularly raises money for bereavement charities, cancer research and others—and the fact that it was a popular and inexpensive venue for christening parties, wakes and wedding receptions, and had the support of the vicar of St Christopher’s church.
	After considering the application, and when deciding to list The Bittern, Southampton city council said that the application
	“demonstrates a high level of community support for an asset with mixed use, combining both a pub and a community and cultural focussed facility considered to be of significant value to the local community. The community-based activities that take place at The Bittern, and have taken place for several years, could not easily be replaced elsewhere in the locality, and could not provide the central community hub provided by The Bittern”.
	That was a good judgment, and The Bittern was listed on 24 July.
	The intention of the community right to bid is that, once listed, the community has the chance to raise the money to bid for the pub when it is placed on the open market. The process does not guarantee success—it does not force the pub to be sold to a particular buyer—but it gives people a fair chance to bid and to bring a new community-owned pub business into play. The reason for this debate is that that might never happen for The Bittern. The listing process is rightly public and owners have to be consulted. As the city council told me, the process has to meet good standards of transparency, audit, reasonableness and meet the necessary legal requirements. From the outset, the council’s officers took a positive view both of the principle of the legislation and of the application they were being asked to consider. They had to consider it objectively, but this was not a situation, like those I have heard of, where the local authority was resistant to the idea of listing assets or wanted to make it as difficult as possible. I will come back to that in a moment.
	The problem is that in order to evade the right to bid, Punch Taverns entered into an agreement to sell to McDonald’s on 19 June, less than a month after the listing process began. Even if the council had been able to move faster—this was the first application it had received under the Localism Act—it would have had to move with unrealistic speed to list the pub in the short period between its receiving the application and an agreement being reached to sell the pub. Unfortunately, the law is clear about the position created by Punch Taverns and McDonald’s. There is an exemption from the community right to bid in the case of
	“an option to buy...entered into before the land was listed”.
	Once the sale had been agreed, McDonald’s placed a unilateral notice on the land title. That effectively prevents the sale of the pub to any third party, including the Save
	the Bittern campaign and the community. In other words, the whole intent of the community right to bid has been thwarted.
	Emerging evidence up and down the country shows that there is a string of pubs—including the Tumbledown Dick in Farnborough, which is also being sold to McDonald’s, and the Golden Harp at Maidenhead, where Tesco is involved—for which communities have achieved listing status but cannot bid because of prior agreements to sell. There are examples of sales to developers who then offer to sell back to the community at a far higher price.
	The Plunkett Foundation, which the Government have commissioned to provide support to community groups, tells me that about 60% of community groups seeking the listing of assets of community value are dealing with an unwilling seller. I want to put on record my thanks, and those of the community, to the Plunkett Foundation for the advice and support that it has given us throughout this process. It is very helpful to have an independent organisation that is able to steer community groups—and, indeed, Members of Parliament—through the complexities of the legislation.
	This situation, in which members of the community are able to get their pub listed as a community asset but are then unable to bid, is a real disappointment, because there is no doubt that the listing of community assets has been a real success, and I do not want to take anything away from that tonight. The Campaign for Real Ale tells me that more than 200 pubs have been listed. The Plunkett Foundation says that more pubs have been listed than any other class of community asset. This shows that there is a huge demand out there for making a real success of the legislation and the intentions of Parliament.
	Those organisations also point to problems, however. Some councils have, unlike Southampton, tried to gold-plate the requirements, imposing a level of formal and legal status for community bids that is not required by the legislation. Other cases, such as that of the Albert Inn in Wyke Regis, have been rejected on the erroneous ground that there is another pub 700 metres away. CAMRA is also concerned that the right to bid can be evaded if a pub is sold as a going concern, even if the purchaser has no real intention of retaining the pub. There is no ability to freeze the legal status of a pub when the listing process begins; nor is there any requirement to sell to the community. There could not be any such requirement to sell to a particular bidder. Those provisions do not exist in the law at the moment. Councils may use listing status as a relevant planning consideration, but many do not do so. Other loopholes are also becoming widely known, including the leasing of a pub for a period of time in order to evade the provisions of the law on the community right to bid.
	Almost inevitably, many attempts to get a pub listed as a community asset begin only when it is realised that a pub is under threat, and the process gives too wide a window for owners to evade the intentions of the law. It is not a fair fight when a community such as mine in Southampton finds itself up against Punch Taverns and McDonald’s, and something needs to be done to even things up. Even where a council is as supportive as Southampton was, the onus is on the community group to get everything right. The owners have the right to see due process from the council, but they can use the listing time to evade the intentions of Parliament.
	I hope the Minister will agree to an urgent review of the working of the Localism Act to see whether there are practical ways of closing this loophole. Perhaps it would be possible, when there is a particular threat, to place a freeze on the legal status of the pub for a few weeks, to enable the listing to be considered and to avoid a sale agreement being entered into. There might be other ways of solving the problem as well. I have been in Government, and I know that the temptation is often to wait until the evidence is overwhelming before stepping in, but the Minister would be well advised to have a look at this matter now; otherwise, too many community groups will put their efforts into campaigns that are ultimately fruitless.
	The sale of The Bittern has not yet been completed. We cannot be sure, but a reasonable assumption is that McDonald’s has agreed to buy, subject to the building or site getting the necessary planning permission. This actually leaves the one hope that the Save the Bittern campaign can hang on to. No planning application has yet been made, although McDonald’s told the Southern Daily Echo in August that it had submitted a pre-planning application. Perhaps there will be legitimate grounds for planning permission to be rejected. If that happened, perhaps McDonalds would withdraw, and if it did, it would presumably open the door to the community bid once again. At this stage, we can only speculate and hope.
	That brings me to the second issue. One thing is certain: the change of use itself—from pub to fast-food restaurant—does not need planning permission. That issue has been raised repeatedly by MPs in debates over the years and by the all-party save the pub group, whose chair, the hon. Member for Leeds North West (Greg Mulholland) is unfortunately abroad—otherwise, he would have been in his place this evening. The inability of local authorities to block a change of use is the biggest single factor encouraging the sort of links between major companies such as Punch Taverns and McDonald’s, or between the pubcos, including Enterprise Inns and Tesco, Sainsbury’s and other supermarkets, which have cost the country so many pubs in recent years. I urge the Minister to consider again changing the planning laws so that local authorities can determine a change of use.
	I know Ministers have suggested that councils should use article 4 directions, which effectively require all use changes to have planning permission. I believe Ministers have promised simple guidance on the use of article 4 directions, but will the Minister clarify whether that has been produced or will be produced? Will he confirm whether an article 4 direction can be used for an individual pub? Will he confirm that the local authority would need to give a year’s notice of its intention to use article 4 powers, thus creating another huge window to evade the community right to bid? Will he confirm, too, that the use of article 4 exposes a local authority to significant costs—for example, paying the planning application costs for the developer—and risks of compensation?
	I am an open-minded person, and if there were ways of dealing with this issue other than changing the planning legislation, I would always consider them, but it seems to me that the overwhelming evidence suggests that a change in planning laws on the use-class issue is necessary to support pubs such as The Bittern.
	Finally, I turn briefly to the relationship between Punch Taverns and McDonald’s, and similar relationships between pubcos and major developers. As I have said,
	the listing process for assets of community value is open and public, so the community group at The Bittern had nothing to hide. Indeed, when the listing proposal was put together, it was agreed that I should write on its behalf to Punch Taverns asking to open direct negotiations. Punch politely, but firmly, declined, saying:
	“In the case of the Bittern we carefully considered all opportunities but came to the decision that a sale was most appropriate”.
	The interesting point about that is that that is what the community wanted—to buy the pub—so why did Punch insist on going ahead with a sale to McDonald’s when it had the opportunity to get a market price from the local community organisation?
	Punch tried to tell me that whatever happened would be an “asset to the community”, but not many of my constituents would regard yet another McDonald’s as such an asset. Building a fat-inducing takeaway on the main walking route to the local secondary school is anything but, although McDonald’s has tried to tell me how wonderful it would be. It pointed out in a letter that if it opened a fast-food restaurant, it would then be able to work with the local community to organise litter picks! I suppose that is true, but it is not quite what people are looking for.
	Most odd, then, is why Punch simply declined the chance to sell the pub at a proper market price to the local community. By definition, Punch and its shareholders would not lose out, yet it declined the offer. I think the only sensible interpretation is that Punch is working strategically with major developers on the disposal of pubs and that individual sales to local community organisations would disrupt that cosy relationship and cause it some unnecessary hassle. With over 200 pubs converted into supermarkets over the past two years, it is pretty clear that something similar, even larger in scale, is going on between the pubcos and the major supermarkets. I was struck by the words of the chairman of all-party save the pub group when he described Punch Tavern and Enterprise Inns as
	“zombie companies that do not pay dividends, and they have no growth plan or export potential”,
	going on to say that these companies
	“just about pay the cost of their debt by selling off their assets.”—[Official Report, 14 October 2013; Vol. 568, c. 573.]
	That is what is happening now.
	If big companies are getting to together to close the market and deny opportunities to new independent businesses owned by local communities, they are acting both against the public interest and in an uncompetitive manner. That should be investigated, and I hope that the Minister agrees that an inquiry by the Competition Commission would be appropriate.
	The supporters of The Bittern have not given up. We may have been thwarted for the time being, but who knows what will happen? Perhaps there will be valid planning grounds for opposing the change of use. Perhaps McDonald’s will realise that there are only so many occasions on which they can ride roughshod over a local community. For now, the pub is still trading, months after it was expected to shut. Perhaps Punch Taverns will respond to this evening’s debate by opening negotiations. It is certainly far too early to admit defeat.

Stephen Williams: I congratulate the right hon. Member for Southampton, Itchen (Mr Denham) on securing the debate. I also congratulate him on the constructive way in which he has spoken this evening, and the constructive way in which he engaged with us on an informal basis beforehand I fully understand both his own frustration and the frustration that he has expressed on behalf of his constituents, and I can say to him, as one constituency Member of Parliament to another, that I understand that frustration for a very good reason. A similar issue arose six years ago in my constituency involving the Ashley Court hotel in St Andrews. Although the local Member of Parliament, both the local councillors and the entire local community did not want the pub to close, they were powerless to prevent it from being sold to a property developer. It was subsequently demolished, and is now a block of flats.
	I want to describe some of the work that the Government are doing in recognition of the important role that pubs play in the community, to which the right hon. Gentleman referred several times, but let me first echo his thanks to my hon. Friends the Members for Leeds North West (Greg Mulholland) and for Burton (Andrew Griffiths), both of whom do a great deal of good work with Members on both sides of the House in raising the issue of pubs in the community—and, indeed, the price of beer. As always, that subject featured on Budget day, when the Chancellor scrapped the beer duty escalator as well as cutting beer duty, shaving 4p off the average pint. The right hon. Gentleman will know how difficult negotiations with the Treasury can be, but on this occasion even the Treasury was helpful to pubs.
	The Government have also made it easier for pubs to host live music performances, so that they can provide the entertainment which, the right hon. Gentleman told us, takes place in The Bittern, and have extended the doubling of small business rate relief from October 2010 to March 2014.
	The main issues raised by the right hon. Gentleman concerned the rights conferred by the Localism Act 2011. I am grateful to him for paying tribute to the Government for implementing ideas which I understand that he may have supported when he was Secretary of State for Communities and Local Government three or four years ago. These are early days: the Act is still very new, and the community rights conferred by it have existed only since September last year. However, as I told the House on another occasion when dealing with a similar issue relating to high streets, more than 550 assets have so far been listed by communities across England as assets of community value, and I know that the list is growing daily. I do not know whether the right hon. Gentleman follows his former Department on Twitter, but if he were to do so, he would see that nearly every day another asset is added to the local register. The Department is pleased to acknowledge the work that is being done by communities throughout the country.
	The Campaign for Real Ale, to which the right hon. Gentleman referred, has been very active in this regard. Yesterday I met representatives of CAMRA and other organisations with which the Department wants to work in order to promote community rights such as this. CAMRA has produced its own leaflet explaining how to help communities that want to promote their
	local pubs as an asset of community value, and I commend it for doing so. Many pubs have exercised these community rights. The first asset to be listed was The Ivy House pub in Nunhead, which is in the constituency of the right hon. and learned Member for Camberwell and Peckham (Ms Harman). There are many other examples. There is a long list on the CAMRA website. The Rose and Crown in Slaley in Hexham has now been purchased by the community. Not only was it registered as an asset, but it has gone on to be purchased. The Anglers Rest in Bamford in the Peak district is now a community-owned pub. Across the country communities have been able to take advantage of this legislation, not only to preserve the pub in their community but to take on the ownership and management.
	The Government have given real practical support to bring this about. There is not just legislation. We have put £19 million on the table to support partners such as Pub is the Hub and the Plunkett Foundation, so they can engage with communities and make sure they know what these rights are and how to exercise them.
	This right has to balance the rights of the community with those of the owners of the property. Getting something on to the register does not automatically give communities the assets they want. Indeed, this was never the Government’s intention. Judging by the right hon. Gentleman’s remarks, he understands that in a free society we cannot completely fetter the property rights of someone who owns the pub, however objectionable we might think their business practices are. The community rights bid does give communities a better chance to bid for an asset they value in their local community, however. The scheme does not restrict what the owner can do with their property even if it has been listed.
	The right hon. Gentleman talked about planning policy, and he mentioned change of use. The Government have set out a clear and consistent set of objectives for planning reform. We want local communities to exercise power and to promote sustainable development, but permitted development rights have existed in the planning system for a long time. As a councillor in Bristol for the city centre district in the mid-1990s, I campaigned for a reform in the planning use classes at that time, when pubs and restaurant were together in the A3 use class. Fortunately, later on that use class was divided into A3 and A4, and pubs sit in the A4 use class. That means that under permitted development rights pubs can go up from A4 to A3—and I believe McDonald’s would be classified as a restaurant—although planning permission may be required for associated building works.
	The right hon. Gentleman referred several times to article 4. Local planning authorities can achieve objectives outside the use class system by bringing forward an article 4 direction, and this can be used to protect community assets such as public houses. In the last year three planning authorities have made directions under article 4 specifically to control the development of public houses. Two of these directions have been used to prevent demolition, and the third is in regard to a change of use.
	The right hon. Gentleman asked about the geographical extent of an article 4 direction. It can be as specific as a single piece of land and a single building, or it can be across the entire local authority area—Southampton in his case. He also asked about costs that might be visited upon the planning authority. Because an article 4 direction
	reduces the normal planning rights of a property owner, if they subsequently have to apply for planning permission because of an article 4 directive, they do not have to pay a planning fee. To that extent, there is indeed a cost to the local authority.
	Thirdly, the right hon. Gentleman asked me whether compensation would be payable. The advice I have for him is that that possibility can be mitigated if a planning authority gives sufficient notice. Indeed, Bristol has recently brought in an article 4 direction to control the spread of houses in multiple occupation and it gave 12 months’ notice. Over the past two years, 270 article 4 directions have taken place. He also asked about guidance on article 4, and the Department has been moving on that. A review of guidance was undertaken by Lord Taylor of Goss Moor and that has been published online for comments. The period for those closed in October and the Department is considering what more to do.
	I entirely sympathise with the points that the right hon. Gentleman was making. I was glad that he paid tribute to the community rights that have been put in place, and I am sorry that on this occasion they were not able to help his constituents. However, the Government do want to work with organisations such as CAMRA and others that want to protect the use of the pub and other community assets. Our message is not to wait for a threat but to move now. That is what CAMRA is advising its members up and down the country to do. We are saying, “Do not wait for a threat. Move now to list your asset of community value.” That will provide the protection that the Localism Act affords.
	Question put and agreed to.
	House adjourned.